We do not analyze market sectors, seek defensive positions, fly to precious metals when pundits would traditionally call to do so.  We concern ourselves with only one thing:  The ratio of your holdings amongst the broad domestic equities market, the broad (developed) international equities market and the broad United States Aggregate Bond market..

At any given time, your account consists of four, and only four, investments.  An Exchange Traded Fund which maps the broad United States  equities market, an Exchange Traded Fund which maps the broad developed world equities market, an Exchange Traded Fund mapping the aggregate United States Bond Market, and any cash position you wish to hold.  The mathematical justification for this system is beyond the scope of this presentation, but we will be happy to discuss the math at length (indeed ad nauseum)
with you.

Your holdings are then re-balanced on a quarterly rota, to ensure that your holdings remain aligned with your risk tolerance and objectives.

Like any mathematically-defined game, this “playing of the odds” MUST be followed, ideally, without exception.  If we were to forego re-allocating your account (because we were "playing a hunch that domestics were on a roll" or any other such nonsense), you will likely suffer some degree of opportunity loss in your return.  In extreme circumstances, this sufferance may be significant enough to offset the “return-advantages” previously experienced.

As these re-allocations occur only quarterly, please do not fear that you will be phoned at 10 am with a suggestion to “Get it all in the Domestic Index!  Now!” and then move it back out at 3 pm.  That is not professional asset management.  If you want that type of “action”, Casino Wagering is available in Connecticut.

Why do it this way?

Because markets are substantially more predictable than market segments or individual equities.  With increased predictability, one can achieve more predictable (read: “consistent”) results.  Our system, back-tested over decades, yields slightly less to slightly more than the broad market return (depending on your risk tolerance), with much less risk than the broad market, BEFORE FEES.  Not bad.  But here’s the terrific part:  Adjusting for fees, we are able to out-perform the market (and your august Investment Firm) by another 1-2 %.  The power of compounding is a very powerful tool for you, the investor.  If, rather than lopping 1-2% off of the top of your return for fees to [fill in Brokerage here], you retained that money in your account, for it to grow over the next periods, and the next…you get the point.

*N.B.:  A quick review of the power of compounding*

Of course, we all understand this concept, but sometimes there is nothing quite like a look at actual figures to drive the point home.  If we assume two identical Investment Accounts, each with a starting value of 100, each returning an identical (and conservative, long-term) return of 8% per annum, with one Account being charged .5% (FSBW's Fee) and the other charged at 2%, a high, but not uncommon 'wrap fee' charged by the larger Firms, the Account values over twenty years appear thusly:

*Recall that each account was based upon identical assumptions,  except for the fee charged.

Now, if we run the same time period and fees, but change the return to reflect the Compound Annual Growth Rate of our Highest-Risk Portfolio of 10.72%, the numbers appear as:

START VALUE TARP FIRM           100                                          START VALUE   FSBW                 100

END YEAR 10  TARP FIRM           231                                          END YEAR 10    FSBW                 265                

END YEAR 20  TARP FIRM           532                                         END YEAR 20    FSBW                  700                

Rather telling numbers, wouldn't you say?

You can't argue with math.  I've tried;  Math just gives you a really haughty look and turns away.

OK, Smart Guy, Couldn’t I Just Do This Myself?

Yes, you could, but no, you won’t, at least not effectively.  Which is the whole point.  Effective execution of a well-crafted plan will tend to produce desired returns.  Done ineffectively, performance will suffer, possibly very badly, depending on your luck.  If you wish to depend upon luck, there is no shortage of games of chance out there.  Have fun, I hope you are very lucky.

We’re professionals, we do this full-time, for a living, we’re very smart and have the experience and the computers.  We do it in order to help you and charge a very reasonable fee.  Just let us do our job.  Plus, we like to take you to our club to play golf, which ain’t a half-bad deal, either.

If you are a more technical type, we will be happy to spend literally hours discussing the intricacies of the mathematics involved.  If you are a bit more pedestrian, like me, let’s talk college hoops, English Football, watches or the mechanics of effectively throwing a baseball.
Look, I went to Law School and practiced Private Criminal Defense Law for eleven years and the best advice I can give you is that old chestnut that a man (or woman) who represents him/her-self has a fool for a client.  I wouldn’t dare represent myself on anything beyond a traffic ticket and I’ve tried murder and rape cases.  Trust me on this one, the road to H-E-double hockey sticks, and more importantly, vast-underperformance, is paved with your best intentions.