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Our Team
Strategic Wealth Management
Investment
Philosophy and Approach
How We Add Value
Fee Structure
Frequently Asked Questions |
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Investment
Philosophy and Approach
Objectivity is the key word. Trust
Company’s “Multiple Managersm”
investment approach delivers a portfolio of carefully
selected investments tailored to provide consistent, superior results at
tolerable levels of risk. We select experienced and successful
independent money managers to make the actual security selections, which
eliminates the conflicts of interest associated with “in-house”
investment products or “one-size-fits-all” investment management styles.
Are you concerned with growing
wealth or preserving family assets through
multiple generations? Or do you have specific needs such as handling the
proceeds from the sale of a business or appropriately reinvesting a
company retirement plan rollover? Whatever your objectives, the surest
route to achieving them is through a specifically focused investment plan.
First, we analyze your current investment portfolio relative to your
financial goals. Next, we make objective recommendations, applying
time-proven principles customized to your specific situation. Trust
Company constructs independently managed portfolios, typically in excess
of $1 million, that may incorporate multi-capitalization, multi-style,
domestic, global, equity, real estate, hedge funds and fixed-income
securities. And finally, we monitor performance to factor in changes in
the investment environment to make sure your portfolio stays optimally
designed to meet your goals.
Trust Company makes its investment recommendations
by focusing on these guiding principles:
1) Managing Risk
Our goal is to produce
long-term capital appreciation, commensurate with your definition of an
acceptable level of risk. Capital appreciation, by its nature, entails
some level of risk. Investors unwilling to accept some risk would
eventually experience loss of purchasing power due to inflation. The key
to successful investment management is balancing risk and return. In
the abstract, equities historically achieve higher capital appreciation
than bonds over the long term, but your investment plan is not an
abstract, and thus requires both strategic and tactical monitoring.
2) Strategic Diversification
and Asset Allocation
A well-diversified mix of asset classes and investment styles will, over
the longer term, reduce risks and maximize returns. We do not believe in
“market timing” or in frequent switching between investments in an attempt
to outperform the market. “Time in the market,” not “timing the market,”
is the key to investment success.
3) Independent Money Management
Firms
We constantly assess the talents of investment professionals around the
country. We interview, analyze, select and monitor exceptional
investment managers. These firms must have demonstrated the talent and
ability to deliver superior investment performance over an extended
period, in both rising and falling markets. They must possess the
discipline to adhere to their investment focus, rather than following the
herd, or chasing the latest financial fad. It is our responsibility to
monitor this adherence to discipline, to avoid “style drift,” management
turnover, or inferior performance.
Trust Company is
somewhat unique in that we don’t make the investment decisions within
our firm; we manage the investment decisions. We believe this is
an important distinction.
4)
Portfolio
Construction
Trust
Company identifies the best
opportunities using both a quantitative and consultative approach. We
believe the foundation of any successful investment experience starts
with capturing capital market returns using enhanced passive funds
through Dimensional Fund Advisors
(DFA). DFA’s approach is
grounded in decades of academic research conducted by many of the best
and brightest minds in economics and finance (including several Nobel
laureates). Although DFA holds true to the tenets of market efficiency,
they are not a traditional indexer (like Vanguard, for example) in that
they have successfully increased returns through trading efficiencies
and by constructing more focused and highly defined asset class
portfolios. With over $120
billion in assets under management, DFA offers
investment solutions across all asset classes and has
demonstrated an ability to consistently deliver superior asset class
returns across large cap, small cap and international equities.
5) Tax Considerations
Trust Company seeks to enhance after-tax returns in taxable accounts. Tax
efficiency in your portfolio is achieved using strategies such as tax
loss harvesting and low security turnover. Tax considerations should
never dominate your investment plan, however.
6) Comprehensive & Unbiased
Approach
When choosing the investment allocation and money managers for your
portfolio, Trust Company considers your specific needs, risk tolerance,
time horizon, financial circumstances and life goals. This process takes
the time and commitment of both the client and our firm. Only after
thorough analysis and discussion do we implement the investment plan.
7) Portfolio Rebalancing
Investment styles (such as growth vs. value) inevitably flow in and out of
favor. As a particular style outperforms others it can grow to represent
a disproportionate share of a portfolio if left unchecked. We
periodically rebalance portfolios to maintain agreed-upon asset
allocation benchmarks. Rebalancing is one method we use to control risk. |
