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Our Investment Philosophy
Monday, 12 July 2010 13:49
Last Updated on Monday, 12 July 2010 14:25
We believe in the following concepts:
- Risk and return are related - there is no such thing as a "free lunch"
- Structure determines performance - asset allocation, not selection and timing, is the primary determinant of long-term returns
- Markets work - competition drives market efficiency
- Diversification - minimized uncompensated (unsystematic) risk that can undermine long-term performance
- There are 2 primary factors to Fixed Income returns:
- Maturity - longer-term fixed income investments are more risky than short-term investments
- Default - Investments of lower credit quality are more risky than higher credit quality investments
- There are 3 primary factors to Equity returns:
- Market factor - equities (stocks) versus fixed income (bonds)
- Size factor - small company stocks have higher expected returns than large company stocks
- Price (Value) factor - "value" stocks (typically lower priced) have higher expected returns than "growth" (higher priced) stocks
For the reasons listed above, we construct portfolios for clients based on their risk tolerance and financial goals. We create these portfolios with low-cost, institutional, asset-class based mutual funds. We build the portfolios to be as efficient as possible - meaning we maximize the expected return for the amount of risk a client is willing to accept.
We do NOT do the following:
- Time the market - we believe that this cannot be done effectively
- Select individual stocks or bonds - we believe this adds unsystematic risk to a portfolio - therefore, the risk is not rewarded with increased expected returns
- Pick the "best" mutual funds based on past performance or rating service
- Chase trends
- Attempt to "outperform" the market or other advisors
- Change a portfolio based solely on current market events
- Make predictions or prognostications about the market or the economy
Some people assume that the type of investment management we adhere to is Indexing, Our philosophy is actually different from Index Management and Active Management. The table below summarizes the difference in the three methods.
| Integra Wealth Philosophy | Active Management | Index Management |
| Assumes markets work | Assumes markets don't work | Assumes markets work with no liquidity cost |
| Captures specific dimensions of risk identified by financial science | Attempts to beat the market through security selection and market timing | Allows commercial benchmarks to dictate strategy |
| Minimizes transaction costs and enhances returns through portfolio design and trading | Generates higher turnover, transaction costs, and taxes due to speculative trading | Accepts high transaction costs and turnover in favor of tracking |
Education
Comprehensive Wealth Management
Integrated Tax Planning
Behavioral Counseling
Education
The rules of money are being redefined. Knowledge is the new money. We believe that you must be willing to embrace financial education so that you can make well informed decisions about your money for the reasons that are important to you. Our job is to distill the complexities of today’s money and help you better understand the choices available to you so that you can assess how your choices will affect you, thereby enabling you to make good decisions that you can feel confident about and that will give you the highest probability of achieving your goals. Time is the one thing that money cannot buy; therefore time is everything . Read the Full Story
The rules of money are being redefined. Knowledge is the new money. We believe that you must be willing to embrace financial education so that you can make well informed decisions about your money for the reasons that are important to you. Our job is to distill the complexities of today’s money and help you better understand the choices available to you so that you can assess how your choices will affect you, thereby enabling you to make good decisions that you can feel confident about and that will give you the highest probability of achieving your goals. Time is the one thing that money cannot buy; therefore time is everything . Read the Full Story
Comprehensive Wealth Management
Should you refinance your home now; buy or lease your next car? What about managing your cash flow while preparing for retirement and education expenses? What should you do about taxes, inflation, and debt? All of these subjects are part of comprehensive wealth management and should be addressed in a holistic manner - rather than piece by piece.
Balancing all aspects of your financial life can be complicated. We work closely with you - to help you manage and build your wealth. Wealth can be defined however you want. That part is up to you - it can be spending more time with your family, retiring with no drop in your standard of living, sending your children or grandchildren to college, or anything else that you want it to be. Our job is to help you achieve success however it is defined by you.
Read the Full Story
Integrated Tax Planning
Investment management and tax planning are not mutually exclusive. Wouldn’t it be nice if you could have your entire financial position managed in an integrated method – balancing tax efficiency and building wealth? Now you can.
When your portfolio drops in value, you may be able to recoup the losses over time; but the dollars you give to the IRS will never be seen again. Now more than ever, with taxes set to go up over the next few years, you need to have tax planning and investment management on the same page. We don’t know yet exactly what the tax rates for dividends and capital gains will be next year, but most people agree the rates will be higher than they are currently. However, there is a balance between saving on taxes and giving away growth to your portfolio.
At Integra Wealth, we use the latest advancements in finance to engineer portfolios that are very tax efficient without losing the potential for growth. We also utilize advanced tax planning strategies to help you continue to build wealth in the most efficient manner possible. We work closely with our clients’ tax professionals and closely monitor their entire tax position. Read the Full Story
At Integra Wealth, we use the latest advancements in finance to engineer portfolios that are very tax efficient without losing the potential for growth. We also utilize advanced tax planning strategies to help you continue to build wealth in the most efficient manner possible. We work closely with our clients’ tax professionals and closely monitor their entire tax position. Read the Full Story
Behavioral Counseling
We work closely with you in all aspects of your financial life. We want you to call us about any financial matter - if we can't help you, then we will refer you to someone who can. We can help you in areas such as: purchasing or refinancing a home, buying or leasing a car, paying down debt and finding the best solution for college funding, just to name a few.
Read the Full Story
