Investors always want to know how we manage our client's money.

During the "Search for an Advisor Period"....when a potential client is meeting with us for the first time and often interviewing other advisors as well, this question always comes up. 

Good question... and a fair question!

Well, we employ an "active" vs. a passive buy and hold money mangement strategy.  We actively seek to minimize drawdowns in client accounts by reducing risk and raising cash when appropriate, or taking profits and finding new opportunities, or maybe just sitting on the sidelines for a little while with a good amount of cash to redeploy when a new opportunity arises or volatility settles down. We will also apply "hedging positions" to freeze accounts or minimize the downside.


We use ETF's and stocks in our portfolios. An ETF (Exchange Traded Fund) is essentially a basket of stocks that are segregated in some form based on the sectors stocks operate in; if they are large cap stocks, small cap stocks,  growth stocks, low volatility stocks, etc. ETF's catagorize stocks into groups. For example, there is a financial ETF that contains banks and payment services. There is a Semiconductor ETF containing only stocks that are associated with building and selling semiconductor chips.  There are ETF's that are just Large Cap Growth stocks or Mid Cap stocks only, and even country specific ETF's.  So, there are nearly 3,000 ETF's out there in all these different forms.  

We also use stocks in our portfolios. We like to have a solid base of good well known Blue Chip stocks as core stock positions. Some examples would include stocks like Apple, Microsoft, AT&T, Verizon, WalMart, ExxonMobil, Disney, or JP Morgan Chase to name a few.  Then on top of those we like to add some more speculative stocks that are smaller companies, or not so well known but have great potential price appreciation.  These more speculative type stocks are not long term holds and will get switched in and out much more often because they can have much greater and faster price fluctuations.


Our process for selecting ETF's and stocks is proprietary so we're not giving out the exact details on that but will explain some of the process here.

For the ETF portion we want to have a core base of the S&P-500 and typically the Nasdaq 100 or some form of the Nasdaq. These two positions will typically contain between 40%-60% of the portfolio. Then we look for sector ETF's that will consist of roughly 20%-30% of the portfolio. Finally, we will have the core Blue Chip stocks making up approximately 10%-15%, and the remaining 5%-10% will be lesser know more speculative stocks that get rotated more frequently. 


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