Services
Investment Management
Our Service
The number of investment alternatives is overwhelming, the results widely disparate.
Grubman Financial is an asset management solution. Our financial planning orientation allows us to focus on each client's requirement for investments returns. We develop an asset allocation to target the return you require to fund your financial objectives.
The next step is to propose a specific investment portfolio. Once our proposal is accepted we establish an investment account in your name and make the initial investments. We monitor the portfolio, adjust the positions to reflect current conditions and rebalance periodically to the desired asset allocation.
Part of our job is to educate our clients and set reasonable performance expectations. Three-quarters of money managers underperform their benchmarks, so clearly professionals are not doing a very good job of educating clients. In the investment world performing as well as the benchmarks is a job well done, and one not often achieved.
Combining investment management with tax and financial planning allows us to help our clients minimize taxes, optimize cash flow and provide clients with helpful and timely financial advise.
In addition to portfolio management, we take care of our client's account service requests, including money transfers, beneficiary designations, direct deposits, charitable donations, etc.
Investment Basics
Let's start with the basics of asset allocation. The primary determinant of your portfolio's performance is the asset mix. Asset allocation has been shown to determine up to 90% of portfolio returns.
During the 1990's the average technology mutual fund gained 33% per year and 49% per year from 1995 to 1999! Tech stocks then lost 68% from March 2000 through September 2001.
The important investment decisions here were whether and when to invest in the technology sector, not whether to buy Cisco or Dell or Microsoft.
Asset correlation is another important factor in portfolio management. Asset correlation is the extent to which the returns of one asset class are affected by the returns of another. Having highly correlated assets in a portfolio increases its volatility.
While technology stocks lost over 60% over the past 15 months, bonds gave gained 14%. Adding bonds to your asset mix will reduce the volatility of the portfolio.
Besides allocation and correlation, the third major consideration in portfolio design is risk. Risk is a critical variable in the investment equation. Investors should endure the least risk possible for the desired investment return.
Our investment philosphy is based on the knowledge that reducing investment expenses and minimimizing taxable distributions are risk-free methods of increasing investment returns. And risk-free returns are inherently superior to risky returns.
