Asset Management

Aside from our comprehensive financial planning services, AFG provides asset management services utilizing nonproprietary securities that may include: individual equities, bonds, ETFs, fixed income securities, mutual funds, alternative investments, and commodities to name a few. Investment products used and or recommended are commission free in nature and have lower costs compared with loaded financial products typically offered by most financial advisory firms. We receive no compensation for products and other related services recommended. Fees for our asset management services may be found here.

Client utilizing asset management services include:specification of investment objectives & constraints (Investment Policy Statement), risk-tolerance profile, account transfer assistance, choice of the asset mix (asset allocation), formulation of portfolio strategy, selection of securities, portfolio revision through rebalancing as needed, ongoing monitoring and performance evaluation.

We tailor each client's portfolio to their respective goals and overall financial profile. Our portfolios are created using mathematically proven analysis built on the academic framework that won the Nobel Prize in Economics in 2002. We focus on the extreme details and take out the emotions and subjective nature our of picking investments and creating an appropriate portfolio.    

Investment Philosophy

We believe and employ a long-term term approach primarily using a passive management approach with low-cost index funds and ETFs. With that, we do see the potential benefits provided by an active manager. We find that a blend comprised both perspectives. This hollistic approach provides tax effeciency through sound investment selection combined with appropriate use of active management strategies in portfolios on the periphery. 

Invest to achieve long-term goals: When analysts look at stock and bond market returns, we are generally looking at results over the long term.  The assumption is that investments will be held for a long time frame in order to experience an average return.  For bonds, the appropriate time frame is 3 to 5 years and for stocks, it is 5 to 10 years.  Whatever money you will need within the next three years, that money should be held in relatively safe investments like CDs and money market funds.

Ensure Broad diversification, with exposure to all parts of the stock and bond markets, reduces risk: A portfolio should hold a mixture of stocks, bonds, international stocks, and perhaps some commodities and emerging markets stock.  These are the traditional asset classes.  The riskier asset classes should be held in smaller amounts as they are meant to be a diversifying agent rather than the engine for the portfolio.  By holding a basket of assets classes, the premise is that all the “eggs” in the basket will be performing differently.

Investment Selecion: Research shows that 90% of portfolio returns are directly related to the asset allocation.  That is the percentage of stocks vs. the percentage of bonds in the portfolio.  The actual stocks, bonds, mutual funds or ETFs you choose are a minuscule factor in the long term performance of the portfolio.
Consistently outperforming the financial markets is extremely difficult: Even though an investor or manager may outperform the market in the short run, in the long run it is nearly impossible to consistently outperform the market. 

Minimizing cost: Minimizing investment costs, both fees charged within mutual funds, and trading costs, is money you keep in your pocket: and more money that can be invested.  Over long periods of time, the compounding effect of high fees is really quite astounding.

Market-timing is a losing strategy: Studies have consistently found that the average investor buys when the market is high and sells when the market is low.  One study showed that while the average mutual fund returned 10.8% in the 20 years ending in 2007, the average mutual fund investor only earned 4.48%.  If you or anyone you know did outperform the market, it’s due to sheer luck which is unlikely to continue for long periods of time.

Keeping your emotions in check: Advisors are objective professionals ensuring accountability for all interested parties. Changes in the market are natural and most clients are better served by focusing on their long-term objectives and not making ad-hoc decisions based on short-term events. 

Past performance of markets or of any individual security may not be indicative of future results. Investing involves risk and potential for loss. There are no guarantees.