At Main Effort our investment strategy is driven by one question:
"What is the purpose of this investment?"
The answer to this question drives our decision making in the construction of our portfolios. Every decision we make with regards to the portfolio must be based upon the specific purpose of the investment and what it is designed to achieve. Once we identify the purpose, we apply the following fundamentals to every portfolio we build:
Diversity: Each portfolio is carefully constructed to maintain a solid diverse representation of the portions of the market we are trying to capture. We look to mitigate risk by limiting over exposure to any security or sector. We minimize or eliminate any redundancy to other portfolios. Along with our own individual security portfolio we add further diversity through the use of mutual funds and exchange-traded funds (ETFs).
Asset Allocation: Once we determine the purpose of the investment we ultimately determine the ratio of equity (stock) vs. fixed income (bond or cash) positions. The asset allocation is a crucial piece of the portfolio and is carefully reviewed on a regular basis to ensure that it is accurately reflecting the objectives of the portfolio.
Fee Consideration: Investing comes with a price whether it be advisor fees or expense fees built into the investment. We are very conscious and sensitive to the overall effect of fees on the portfolio over time. Our portfolios are created to minimize fees to the maximum extent that we deem possible without compromising performance potential or critical insight. Our advisory fees for a portfolio will normally cover all expenses incurred for full and ongoing financial planning for each of our clients.
Focus: Perhaps the most important factor in building a portfolio is creating it so it will focus on achieving the specific purpose identified from the start. Our investment selections are carefully researched and selected in an effort to provide the best representation of a particular type of investment without compromising diversity, asset allocation and cost. Our models are continuously reviewed and adjusted to ensure that we are providing our clients with an appropriate combination of investments with the goal of achieving the portfolio's purpose. We review our investment selections on a daily basis and review each individual portfolio up to 4 times per year.
Synchronization: We will synchronize the investments that we manage with any assets that are held under different custodians ensuring that we maintain the appropriate allocation and diversification across all of your assets. We will provide fiduciary advice on your assets held away in order to make sure that they support your overall plan.
Although every portfolio is customized to the individual based on risk tolerance and synchronization with other assets, we have 4 categories of portfolios:
Income Generation: Our signature portfolio type. This portfolio is primarily used for retirees to generate income. Ideally our clients will take only dividend and yield income from the account and use that to augment their income in retirement. This portfolio is also used by non-retirees in our “flex” account to generate an income that can be used to pay down debt (often mortgage), to reinvest on itself, or to commit to a long-term investment.
Growth: For those accounts that have a longer time horizon we apply our growth portfolio. This strategy combines low cost index ETFs with an individual security portfolio as well as select mutual funds. The portfolio generates active dividends that our reinvested upon itself. The asset allocation can range from 60 to 90% equity exposure depending upon the individual client.
Risk Mitigation: This is our portfolio for clients who want to have market exposure for the potential of attaining gains over time however want to limit their risk by having fixed income investments outweigh equity exposure. This model of course has market risk however we work to mitigate the risk by lowering overall traditional risk exposure.
Concentrated Value: The most aggressive of our models, this portfolio is comprised of 100% individual securities that we deem as “value” or underpriced securities. The portfolio will always be created as part of a synchronized strategy with other portfolios and the purpose of this portfolio is aggressive growth.