Index funds
As a starting point to describe our strategy, we believe most portfolio managers have a very difficult time beating a portfolio of index funds. Index funds are liquid, low cost, and tax efficient. Numerous studies have proven that very few managers can consistently pick the right stocks or bonds to beat the market. We believe there is more value in focusing on the mix of asset classes than from stock picking. We build our clients’ iFolios with globally diversified index funds – usually 8 to 15 different index funds, representing each of the asset classes we want to include in your portfolio. You might have an index fund, for example, representing U.S. Short Term Bonds, U.S. Large Growth stocks, International Value stocks, and so on. After we’ve determined what goes into the portfolio, we’ll establish how much to invest in each index fund. Importantly, we establish an allocation range for each index fund and not just a static target to allow us to seek both growth & protection.

Trend following
Once we’ve built your globally diversified iFolio for you, we have to manage it over time. We apply our proprietary trend following signal to track the long-term price trend of each of your index funds. When an index fund is trending higher, we’ll be fully invested within your allocation range to fully capture growth and income. On occasion, an index fund will trend lower, and we’ll trim back or sell that holding to the low end of your allocation range to provide protection from loss. It’s a systematic process that eliminates guessing and indecision.

Reporting & feedback
Each month, we’ll provide Portfolio Review reports. These reports will review your selected iFolios model, your asset allocation, portfolio holdings, and performance. We want to continually ensure that what we’re doing for you is the right thing, that we’re doing a good job of it, and that it’s working for you to provide the growth and income you desire, within the risk tolerance you can handle.