Total Portfolio Program

We design and manage low-cost, extremely diversified portfolios based on your goals and needs.  The design of individual client portfolios will differ, but they are all firmly grounded in our overall investment philosophy.  This philosophy is thoroughly encompassed in the Total Portfolio Program as we implement our approach across your investment accounts.

Portfolio Design Process

  1. Determine what the purpose of the portfolio is.
    • Principal preservation, income generation, growth?
       
  2. Based on the purpose and client factors (risk tolerance, etc.), decide the overall percentage of stocks and bonds in the portfolio.
    • 80% stock and 20% bond?
    • 40% stock and 60% bond?
       
  3. Decide which asset classes to include in the portfolio.  Determine how much of each asset class to include.  This is your portfolio’s overall asset allocation.
    • Cash Equivalents
    • Bonds:
      • Domestic vs. Foreign
      • Short-Term vs. Intermediate-Term vs. Long-Term
    • Stocks:
      • Domestic vs. Foreign vs. Emerging Market
      • Large vs. Small
      • Value vs. Market vs. Growth
    • Real Estate and Commodities
       
  4. Determine what constraints the portfolio is subject to. Common constraints we work with are:
    • Limited investment choices in 401(k) or 403(b) plans
    • Low cost basis on taxable positions
    • Holding certain stocks, bonds, and/or funds due to sentimental reasons
       
  5. Determine which asset classes will be in each account.  Different account types may hold different asset classes in order to:
    • Handle portfolio constraints
    • Maximize current and future tax efficiency
       
  6. Choose the best course of action for accounts with constraints.
    • Determine which asset classes the “held” positions best represent
    • For retirement plans, choose the best investment options to represent recommended asset classes
       
  7. Choose the most appropriate investment options for each of the remaining asset classes.
    • DFA and other suitable mutual funds
       
  8. Implement in the most cost- and tax-efficient manner.
    • Keep transaction costs to a minimum
    • Control tax impact on sales of securities not recommended for the portfolio

Portfolio Monitoring

Once a portfolio is designed and implemented, it is very important to monitor it going forward. Ongoing monitoring helps your portfolio stay true to its original design. A portfolio that is allowed to drift and become unbalanced will incur additional and unnecessary risks. Ongoing monitoring also helps your portfolio maintain its cost and tax efficiencies. Our monitoring includes:

Monthly
Review, analysis and ongoing advice in the following areas:

  • Triple Layer Portfolio Rebalancing:
    • Stock-to-Bond ratio
    • Domestic-to-International ratio
    • Individual Asset Class level
  • Taxable income and realized gains
  • Opportunities to take tax losses (tax-loss harvesting)
  • Monthly contributions and automatic purchases
  • Monthly distributions and cash management

Semi-Annual

  • Portfolio performance reports
  • Advisory letters

Ongoing

  • Meetings and reviews
  • Ongoing education
  • Advice on contributions and distributions
  • Advice on positions held due to constraints
  • Advice on current and future tax exposure
  • Web access to accounts
  • Tax reports as needed

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