Investment Management
Investment management is an important part of our comprehensive wealth management services.
Prospective clients often ask questions like, “Can you beat the index over 10 years?” They may mean a stock market index like the S&P 500—also called a “market capitalization index."
Investing this way is called momentum investing. Funds that follow an index tend to buy what is already in favor and sell what has already gone down in value—so they end up buying higher and selling lower.
For example, as a company gets more popular and expensive, an S&P index fund will buy more of it even though it’s becoming overvalued. If another company is struggling temporarily and losing value, the fund will sell shares of that stock even though the fundamentals of the company remain strong.
Contrarian Investing
You might want to do the opposite. This is called being a contrarian investor, and it is what we generally practice. In the example above, we would sell the strong company’s stock at a profit and buy the struggling company, looking for a gain when the company rebounds.
Momentum investing performs well in a bull market—when the stock market is on the rise. A market cap index fund will often outperform a diversified portfolio in a bull market. In a bear market, when the market is down for a sustained period, a diversified portfolio might outperform an index fund.
In addition to being contrarian when it comes to which stocks to buy and sell, we are also contrarian in our timing. We invest more when the market is down, based on predetermined valuation trigger points. Our purchases are based on data and evidence of undervaluation. Our clients often do the opposite of what a fearful investor might do, taking advantage of what we see as attractive opportunities.
Basing Decisions On Data
Customized Portfolios
Almost every client at Laurel Wealth Planning has a customized portfolio. With a high professional-to-client ratio (1:20), we’re able to provide more personalized attention, helping us understand our clients well.
There are three keys to building a portfolio that matches a client’s needs and preferences:
Tax Planning
Most clients have positions in their portfolio for tax reduction reasons. They are comfortable holding that position as long as the tax benefit is likely to be more than the compromise on investment performance. We plan what to sell and when based on our clients’ capital gains strategy.
We create charitable giving strategies that have tax advantages.
Client Preference
A client may have an affection for a company they used to work at or a company whose values they believe in.
We discuss whether there are any trade off’s in holding these positions.
ESG Investing
Clients who prefer our ESG investing option may want to emphasize environmental sustainability or gender equality.
This may lead to some deviation from standard portfolios or an index in certain years though our approach emphasizes competitive returns.
Building a Portfolio
When do-it-yourself investors build a portfolio, they usually start by picking an investment tool–like a stock or bond or mutual fund. This is the last step in our process.
Our first step is understanding a client’s goals for their money, their preferred risk level, their tax situation, and any preferences as explained above.
We then set a tax strategy and a risk-reward strategy (i.e., the targeted return vs. preferred volatility). After that comes an asset allocation and diversification plan within those strategies.
Then we factor in global market trends to get specific about the type of investments or industries we might want to hold.
With that framework built, we choose the best investment tools that fit within it. This might include open-end, closed-end, or exchange-traded funds or individual bonds or stocks as preferred by the client.
Context and Communication
Clients can see their results in real time in our online portal, and they can compare their results to various indexes. More importantly, they can call us at any time to discuss any differences in performance, so they understand the strategies behind it and how it fits into their bigger financial picture.
*Investing involves risks, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.
Key Benefits
Contrarian Investing
Customized Portfolios
Tax Planning
Client Preference
Basing Decisions on Data
Context and Communication
ESG Investing
Building a Portfolio
Frequently Asked Questions
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Resources
Talk to your financial advisor today!
Why Choose Laurel Wealth Planning?
Hear What Our Clients Say:
"We started working with Laura almost 25 years ago. Laura and her wonderful staff are not only invested in our financial situation, but they care deeply about our individual stories as well. Communication with clients is key to a long-lasting relationship and the folks at Laurel Wealth are continually updating us on the market, strategies, and outlooks. They also make themselves readily available for any questions or concerns when they arise. You get the whole package with this firm and we are so grateful for all that they have done for us!"
