
Today I want to talk about two concerns that many investment advisors see among their clients, yet an extreme few will vocalize. The reason they do not want to talk about it, I believe, is because they haven't found a solution. Well after much research and historical modeling, we have developed a multi-layer, unconventional strategy that resolves these concerns and produces better returns than the traditional strategy to diversify and just wait for the market to perform. I am not saying that advisors who use the traditional strategy are bad or are purposely going to harm you financially. They are likely good and capable investment advisors, but like me previously, they are just doing what they were taught and haven’t figured out how to offer a strategy outside of the industry norms. Let me explain...

Addressing Investors' Top Concerns: Investors want the best returns, but they do not want to accept the risk of losing money in a down market. Because investors do not want to accept the risk of potential loss, they invest less aggressively, which can cause them to miss out on potential gains in an up market.
THE CONVENTIONAL INVESTMENT STRATEGY

In order to manage those primary risks, advisory firms typically recommend using Modern Portfolio Theory (MPT) to diversify a portfolio through owning global stocks and bonds. The idea of MPT is that you can use a mathematical framework to construct portfolios to optimize expected returns based on a given level of market risk, emphasizing that risk is an inherent part of higher reward. Theoretically, it sounds good; but in practice, it often leaves investors dissatisfied.
THE PROBLEM WITH THE CONVENTIONAL STRATEGY

Because most of us are concerned with both the risk of missing out and the risk of loss, the majority of investors just churn in the middle so they don’t have too much risk either way. But, as the saying goes, “No risk, no reward.” So, in effect, playing it safe by the conventional means typically produces subpar returns when financial markets are great, yet significant losses when market conditions are unfavorable. At this point, you are probably thinking, ‘this doesn't sound so good for me.’ We agree.
HOW WE INVEST DIFFERENTLY
As classically trained investors, we used to only use Modern Portfolio Theory — as the vast majority of other advisory firms still do — but we have since developed an alternative strategy that we believe more effectively addresses the primary investor risks better over time.

We invest a portion of a client's money directly into the stock market using ETFs and/or individual stock holdings. We then strategically layer in other financial instruments that protect against losses in down markets. Finally, rounding out the risk return profile for each client’s portfolio, we use bond and commodity holdings as appropriate. This is how we address investors' top two concerns.
WHAT THAT MEANS FOR YOU
You keep more of your money and grow it faster without the excess risk that brings excess losses. You are happy when markets are up, and do not live in fear when markets are down.

Though we can not predict the future, we can confidently say there will be times when the markets are screaming to new heights and also times when it may seem the bottom is never coming. Our strategy helps you thrive in both realities and everywhere in between.
If you would like to know more about how our strategy can help you, visit our schedule page to book an introductory meeting with Matt or me today. Stay tuned; next week Matt will be posting about the best way to prioritize your retirement contributions.
Sincerely,

P.S. Stay tuned... next week Matt will be posting about the best way to prioritize your retirement contributions.