Investment Management

Whether you're nearing retirement, in retirement, or just starting to save for it, portfolio design and investment management is a key part of the plan.  There has been endless debate around investment styles (passive vs. active), investment costs and fees, and more recently, the use of alternative investments.  So much so, that feeling confident about your portfolio might feel like finding a light at the end of a tunnel that seemingly has no end.  Portfolio design and management doesn’t have to be overwhelming.   

Here are some of our core beliefs:

Active vs. Passive Management

Active Management is when investment managers actively pick investments in an effort to outperform some benchmark, usually a market index.  Passive Management is when a fund manager attempts to mimic some benchmark, mirroring its holdings and, hopefully, its performance as well.  Typically active management has higher costs than passive management.  We don’t believe investment style is as black-and-white (one is better than the other) as everything you can read or hear would have you believe.  We believe investor behavior and psychology, as well as situational variables should be considered.  At Convergence Advisory Group both investment styles are available.

Risk Tolerance

Risk tolerance is the degree or amount of variability within returns an investor is willing to take.  We see a lot of folks who want (and expect) returns that, to achieve, will come with much more risk than they are willing to assume.  Getting to a person’s true risk tolerance isn’t always as simple as a short questionnaire.  As fiduciaries, we find it critically important to help you get your head and your gut on the same page.  We also believe that risk tolerance is fluid and should be continually addressed.

Diversification

The objective of diversification isn’t necessarily to provide increased returns.  Diversification can help manage risk and improve returns within a specific risk tolerance.  We believe in global diversification, which is essentially purchasing asset classes and sectors both inside and outside the U.S.

Cost Consciousness

We live in a world where the loudest voice is often assumed to be correct.  We see this a lot in today’s messages about investment costs and fees.  The longest bull market in history has created the perfect storm for the message that ‘cost is all that should be considered.’  We don’t believe investment management is as simple as find the cheapest option; investment management and retirement income planning is not a commodity.  We believe that the first priority is meeting your financial objectives.  From there, we want to do that as cost effectively as possible.

Tax Efficiency

All else being equal, if you can save a dollar in taxes that is a dollar left in your pocket that you can put to work for you.  There can be multiple opportunities within a client’s situation to improve tax efficiency and keep more dollars in their pocket.  Finding those opportunities is part of our process.