It has taken years of hard work to accumulate your wealth. You deserve a comprehensive and disciplined approach to managing your investment portfolio – the well-oiled engine that runs your wealth management plan. To maximize its performance, your investment portfolio needs to be fully integrated with all areas of your financial life. Our investment management process is a direct extension of our wealth management process, incorporating your goals, risk tolerance, and financial planning.

 

 

Don’t worry... there are no tests or homework. While our goal is not to make you an expert, we’ve found that clients who are educated on the how’s and why’s of their portfolio are less emotional about the market’s highs and lows, more confident in the decisions they make, and ultimately, better investors. We begin our investment management process by educating you on the principles of investing, and throughout our relationship we continue the education with an examination of the finer points of your portfolio and current market events. The education process arms you with the knowledge to make informed decisions, and the confidence to stay the course during market downturns – the key to long-term investing success.

 

Risk Tolerance

There’s no free lunch in investing. Higher returns only come at the price of higher risk. Yet many investors have never taken the time to identify their comfort zone for risk, which leads to stressed, nervous investors. We’ll carefully measure your risk tolerance using a scientific risk-profiling system. If the portfolio is invested in equities, we know for certain there will be periods of time that it goes down in value. Together, we’ll set expectations so that there are few surprises along the way. Because we take the time to design a portfolio you are comfortable with, you’ll be able to relax and sleep better during turbulent markets.

 

 

By now, it should be clear that we like disciplined processes and well-documented plans. So it should come as no surprise that we believe a personalized Investment Policy Statement (IPS) is essential to the investment management process. The IPS provides a roadmap or business plan for your investment portfolio detailing risk and return objectives, asset allocation policy, time horizon, tax management, liquidity requirements, legal constraints, and anything unique to your portfolio. An IPS is so critical to the investment process that many institutional investors are required by law to have one.  That fact alone should serve notice to individuals of the importance of this document.

 

 

Boring works in investing. Our approach to managing investments is based on the Nobel Prize-winning research of Modern Portfolio Theory and the time-tested academic principle of Efficient Market Hypothesis. Looking past the scholarly titles, this simply means that we focus on taking risks that are rewarded and avoiding unnecessary risks. Markets work; that is, it is impossible for traditional investment managers to consistently "beat the market." We will not invest in the latest investment fad, attempt to time the market, or pick the hot stock of the day. The largest determinant of an investment portfolio’s returns is its asset allocation - the particular mix of asset classes such as stocks, bonds, and cash. Therefore, we focus on creating a globally diversified core portfolio using low-cost and tax-efficient investment vehicles.

 

 

Everyone’s heard "don’t put your eggs in one basket." We take that to heart and give you more than the standard stock, bond, and cash baskets for your eggs. Large institutional investors, such as the Harvard and Yale Endowments, have used alternative investments for years to dampen risk and improve returns. Alternative investments such as real estate, commodities, timberland, managed futures, hedge funds, and private equity help smooth out the portfolio’s occasionally bumpy ride, while providing attractive risk-adjusted returns. Alternative investments aren’t for everyone though. We carefully evaluate the risk and rewards of various alternative investments against your goals, and carefully select investments that fit your goals and risk tolerances.

 

 

We don’t hold Monday morning sales meetings. Because we are independent, we are free to recommend investments that are in your best interest. We are not beholden to any proprietary products or "approved lists." Our open architecture investment platform gives us access to best-of-breed investment solutions across asset classes. Whether your investment portfolio is positioned conservatively or aggressively, it will be managed cautiously when selecting and monitoring investments and investment managers. Along with our network of investment partners, we perform extensive due diligence on current and potential investments, including quantitative analysis of investment managers’ returns and risk as well as qualitative analysis of their process and operations.

 

 

It’s not how much you make, it’s how much you keep. Taxes, both income and estate, can devastate even the most carefully planned investment portfolio. The wealth management process by its very nature will lead to tax-efficient investing. Investments are always analyzed and compared on an after-tax basis. Also, by efficiently “locating” assets among your various tax-deferred and taxable accounts, the after-tax return can be improved. While we do not prepare tax returns, we will work closely with your accountant to build and implement strategies.

 

 

Buying low and selling high really does work. Systematic rebalancing can reduce risk and improve returns, while ensuring the portfolio remains aligned with your objectives. Additionally, our consolidated performance reporting allows you to monitor your entire portfolio – including accounts not managed by Henrickson Nauta – in as much or as little detail as you’d like. Through our wealth management process, we will recommend any adjustments to your portfolio that may be necessary given your changing goals and circumstances, as well as any modifications necessary given the changing tax and financial landscape.

 

 

We realize that people are often emotional about money, as they should be. Typically it takes years of hard work to accumulate wealth. Emotions can hijack even the best-laid plans by causing you to sell at market lows or chase the hot mutual fund of the year. The largest determinant of a portfolio’s performance is its asset allocation. The largest determinant of your portfolio’s performance is your emotions. While we can design a customized asset allocation and academically sound investment portfolio that minimizes risk given its expected return, the ability to stay the course through market turmoil will ultimately determine your success. We believe an advisor willing to educate you and guide you through the market’s ebbs and flows is critical to your long-term success. Our empathetic ear and tough love are true value-adds.