INVESTMENT PHILOSOPHY

"The wisdom

of

  re-balancing"

We are not comfortable holding disproportionately large positions in a portfolio, no matter how attractive a company’s prospects. Out-sized positions represent too much risk in the event that the company stumbles. Consequently, we will trim large positions by re-balancing portfolio assets.

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Portfolio re-balancing has the effect of reducing the risk of your portfolio, and it may also increase your long-term rate of return. The basic reason for re-balancing is to maintain your overall asset allocation (as it is written in your Investment Policy Statement "IPS"). Over time, you will find that certain asset classes will perform better than others in your portfolio. Re-balancing is the process of selling some of those asset classes that have done well and buying into asset classes that have done poorly. Academic research has shown that the returns of asset classes tend to revert to their long-term expected return. Therefore, in addition to reducing risk, re-balancing results in consistently “buying low” and “selling high” over the long run. 

A Note From Doug

“The difference between knowing what you have

and knowing what’s possible”

At Stonegate, one of our most important tasks is to keep our clients invested. Only by staying invested over the long term can clients’ portfolios participate in the increased valuation of equities over time. Of course, if one could pick market tops to sell everything and identify market bottoms to reinvest, staying invested wouldn’t be so important. But timing the market is a fool’s game. Idle cocktail chatter aside, we have never encountered a consistently successful market timer.

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To keep our clients comfortable enough to stay invested requires a communications and service effort which helps clients understand the dynamics of the markets and the companies in which they are invested. Not all clients have the same communication needs. Through periodic newsletters,  and frequent telephone and face to face meetings with our clients, we ensure our clients remain as fully informed as they feel they need to be. Good communication is only part of the story, however. Keeping clients comfortable with the markets also requires an investment style which minimizes volatility to the extent possible. We uncover tax inefficiencies and design solution to maximize your after tax rate of return, construct diversified investment portfolios, create retirement solutions and construct your life insurance to be an investment.

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The growth, preservation, and inter-generational transfer of wealth have become trickier than ever. From the macroeconomics of an uncertain world to the tax problems faced by family members who live and work in different countries – and who often follow diverse aspirations – wealth management is a far different undertaking than it once was. We recognize the challenges our clients face; we know how to navigate the maze.

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