I am astonished by how many Americans, even physicians, have spent little time really collecting good information on how their money is being invested!
When a physician finally pronounces the time of death, it is after checking on 5 primary things:
- Unresponsiveness
- Apnea
- Absence of pulse
- Unresponsive pupils
- Absence of heart sounds
In other words, before making a declaration, that declaration is substantiated. Verify, verify, verify. You would not believe how many times we review investment holdings where the physician has pronounced their investments “good or great” without being able to substantiate the claim at all. With zero verification and nothing to substantiate the claim. How do you know your investments are doing well? Compared to what?
What makes your allocation good/great, or unimpressive/subpar? There are measurable, specific characteristics of an excellent allocation and there are specific characteristics of an unimpressive, ignorant investment fund line-up.
You would certainly be filled with doubt if someone untrained declared some diagnosis or attempted to call the time of death without being qualified to do so. As a physician, think of your reaction when a patient comes in and tells you what they think is going on with their ailment. Most physicians appreciate the thought that has gone into the self-diagnosis, but you don’t put much weight on it. Why? Because you know how little credibility someone has in googling symptoms without proper training, testing, or equipment!
How can you be left with any real confidence in your life savings if you have not had a second or third opinion on your investment philosophy?
How Tencap Substantiates Its Investment Philosophy
Tencap has an investment methodology that we believe is academic and intelligent. What are the characteristics of an intelligent and academic investment philosophy? Happy to explain. Here are a few of the characteristics that we assert are imperative in an academic investment philosophy:
- Competitive return – That is to say, of course, our portfolio is engineered to generate the highest return possible.
- Exposure to risk – While we are certainly interested in returns, we are not blindly interested in returns alone. That is to say, we are interested in generating competitive returns, but we are also committed to taking on no more risk than we need to!
- Diversification – This one may land with you as a basic concept, but there is nothing casual or basic about this point. It may be one of the most important topics rendered. Why? Because being properly diversified helps to drive and lift competitive returns, manage risk, and temper volatility. Your advisor should be able to say something about the importance of all three of those elements! Each of those elements is imperative in an intelligent and lucrative investment philosophy, in my opinion!
- Tax Sensitivity – High-income earners pay too much in taxes. Full stop; no apology for my statement. Way. Too. Much! An intelligent investment philosophy had better pay close attention to tax implications! In fact, everything around your money should be carefully and methodically examined and planned around reducing your tax bill. It is unimpressive to have superior returns if they are carelessly obtained and forfeited to taxation. To say that another way, you and your advisor should be carefully examining tax implications – every tax implication! If your advisor does not review your tax return regularly – that’s all you need to know.
- Accumulating, Preservation, and Spending Down Your Money– You need an intelligent philosophy that gets you up the mountain, a methodology to keep you on top of the mountain and to help you come down the mountain. Many advisors are great at one or two of these, but very few of our competitors, in my opinion, are great at all three of these. What’s an example of this? Just spending your money without any real strategy or work to account for bear markets as you spend your money (as you come down the mountain). There is sequence of return risk without that planning and it is rarely properly accounted for in financial planning.
- Cost – In life, generally speaking, the more we spend the better, higher quality/outcomes we involve ourselves with. A home, a car, shoes, clothes, phones, jewelry, hotels, flights, etc. The more we spend, the better the product, usually. There are few places where this is not true – one place it is not true is investments. There is no correlation with high costs and high(er) outcomes in our investments. Jack Bogle said it best, “The greatest Enemies of the Equity investor are Expenses and Emotions.” All this to say, the cost of your investments matter! Do you know what your investment costs are?
The Importance of Second Opinions
The point of this article is, that before you declare your investment philosophy great or garbage, get a second opinion from a qualified group. Verify, verify, verify. If there is something that can be optimized, or if there are inefficiencies that someone could cite, wouldn’t you want to know about them? Even if you disagree with the assertions, it would only occur to you as relevant/meaningful if you can see merit and logic in the point(s). If you see no merit or logic in the points, you can disregard them and continue as you are.
Tencap is Here to Help
14 years in this business says that given the opportunity to coach and teach you how and why your portfolio could be better engineered, you will see the logic and wisdom and accept the coaching.
Create the time and get a second opinion! You work too hard for your money to miss significant and academic ways to be better invested in financial markets. You work too hard for each dollar you earn to not have your investment philosophy be excellent. 14 years of experience says you know your allocation and financial plan is subpar, you just have not created the effort to fix it.
Make the time. What other category is really more important than creating the time for an excellent investment philosophy? If you have any real commitment to obtaining financial independence, it’s time to meet with a licensed financial advisor and get to work! Contact us today to really build and secure your wealth.
The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Utah or where otherwise legally permitted. All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Moreover, this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
Joe Griffin
Joe has been building and managing financial planning firms for the past 14 years. He loves the financial planning space and is very proud of the success and growth that has come from his proprietary marketing and leadership. Joe spent years being involved with the bright minds of the investment committee at Utah’s 529 college savings plan – a plan managing over 20 billion. Joe only works with firms that are stated fiduciaries on a client relationship. Joe is committed to leading a financial planning firm with ethics and integrity. The money management philosophy that Tencap subscribes to is built on strong academics and is supported by a highly impressive academic board. We can't wait to coach you on the excellence that Tencap stands for.
