Personalized Portfolio Management
From the very beginning, we take the time to understand your personal situation, financial goals, time horizon and cash-flow needs. We discuss with you our investment approach and philosophy. We then tailor a strategy to meet your situation and investment goals. And that’s just the start. We check in regularly to help ensure your investment strategy stays aligned with your lifestyle and goals
We aren’t tied to one allocation or investment style. We manage your investments based on your personal goals and our forward-looking views of the market. Our dynamic, flexible approach to investing positions portfolios to benefit from opportunities we see in the global market. As we manage your portfolio, we educate you along the way so you have the knowledge to understand what’s happening in your portfolio and why. We find this transparency helps clients feel more comfortable with their investments.
We get to know you personally. You have a dedicated Investment Counselor who serves as your day-to-day contact. They are your liaison to the Investment Policy Committee, and a conduit for any information you seek. Your Investment Counselor knows the full details of your account, and works to ensure your service needs are met promptly and accurately. Investment Counselors don’t sell any products. They have one job: serving you, the client, by helping you stay on track toward your long-term financial goals.
Transparent Fee Structure
At Global Money Investor, we have a simple, transparent fee structure based on the size of your portfolio. We don't earn commissions so there's no incentive for us to buy or sell investment products or trade your account frequently. This aligns our interests with yours: in other words, if you do better, we do better.
Learn what makes Global Money Investor different.
Since our founding over 18years ago, Global Money Investor has served investors as a fiduciary, meaning we are legally required to put our client’s best interests first. Unlike brokers, we won't push proprietary products like mutual funds or annuities. By taking a client-first approach, we put our focus where it should be: on your needs, not ours.
Portfolio Management 101: Our Fundamental Philosophies
The foundation of the Global Money Investor philosophy lies in the inherent belief in capitalism in free markets. Driving that belief are basic economic principles you may be familiar with, but may not have thought of in the following regard.
Supply and Demand
First is the law of supply and demand, a commonly known concept, but rarely applied to securities pricing. Supply and demand for securities are not reflections of contemporaneous events. The supply of securities is almost completely fixed in the short run, as it takes time and effort to create new shares. Therefore, demand is a more indicative variable of short-term market pricing. By monitoring the demand for securities, we can forecast market expectations. In the short-term, demand, measured by investor sentiment, has the most influence on pricing, while over the long-term, pricing is almost completely a function of supply.
In the long run, supply is the dominant determinant of securities pricing since their supply is nearly completely variable. There is no limit to how many shares may be issued or retired. When the price of securities is low enough, demand becomes infinite for securities. At a certain price level, supply becomes virtually infinite, as investment bankers have incentive to create as much new supply of securities as possible. An excellent proxy for securities demand is investor sentiment. Sentiment oscillates constantly, but it usually varies within a fixed bandwidth. When people anticipate losses, they instinctively sell and park the proceeds in cash until they feel confident enough to invest again. When investors are most pessimistic, they will have already sold, and the next shift in sentiment by default, is up. Once their selling pressure is exhausted, a springboard effect takes place when, at marginal prices, there is suddenly greater pressure to buy than pressure to sell. Prices can then rise quickly as the previous selling pressure dissipates. As demand increases, prices rise. On the way up, those who were most worried and sold their stocks low gradually regain confidence and begin buying as prices rise. This is the proverbial "wall of worry" bull markets climb.
In conjunction with supply and demand is the theory that markets are efficient—that capital markets discount, or reflect, all widely known information. Pertinent information about public companies is public information. News travels fast, and the knowledge and expectations of investors are absorbed by the market as quickly as they are acknowledged. Those seeking to profit act on every bit of news, rumor, and speculation that is available, such that any obvious opportunities vanish before they can be seized. Therefore, one must have new or different information than all others to achieve excess returns.
Capital Markets Technology
Some of those who believe markets are efficient conclude that attempting to beat the market is futile. However we think it's possible to add value by interpreting popular information differently yet correctly, by developing tools to extract new understandings from this information. About twenty years ago, Ken Fisher pioneered the Price to Sales Ratio for investment analysis. We have continuously sought to innovate capital markets science and technology for the benefit of our clients.
Benchmarks and Relative Return
A common objective of investors is to beat the market, but few identify a market to beat. Broad equity indexes like the S&P 500 or MSCI World make good proxies for market performance and hence, a benchmark against which to measure success. However even when measuring success against a benchmark, some forget the importance of relative return versus absolute return. Relative return is the return realized relative to your chosen benchmark. For instance, 5% may not seem like much in absolute terms, but if you achieve 5% return on your portfolio when the market is down 15%, you've beaten the market by 20%. Likewise, a 10% absolute return might sound better, but if the market returns 20%, you'd be disappointed for having lagged your benchmark by 10% in relative terms. We discuss how to choose a benchmark, and why to use one, in the pages that follow.
Are You An Active Or Passive Investor?
And what's the difference?
Active portfolio management is an attempt to beat a market index (e.g., the S&P 500 Index). It entails making active decisions, like "should I own stocks or bonds right now" or "should I buy more technology stocks this year" or "should I sell XYZ stock before its next earnings announcement".
The key benefits of active management are the possibility of outperforming the market and the option to turn defensive in the hopes of avoiding bad market environments.
Passive portfolio management is an attempt to simply mimic a market index and minimize costs along the way. There are virtually no decisions to make in passive management once an index is selected.
The key benefit of passive management is reducing the risk of materially underperforming the market which may reduce the odds of achieving your investment objectives.
Neither strategy is inherently better than the other. What matters is which is most appropriate for you in attaining your long-term investment objectives.
To learn how to better determine which investing approach is most appropriate for you, click here.
Should You Pursue Active or Passive Management?
For self-directed investors, the critical questions becomes, "Do I possess better portfolio management skills than the average of all market participants, and by a big enough margin to overcome the transaction costs I will incur by making trading decisions?" If the answer is "yes", then active self-directed management may make sense.
If the answer is "no", then another question must be answered, "Can I hire a manager that possesses better portfolio management skills than the average of all market participants?" If the answer is "yes", then active management delegated to a professional may make sense.
If the answer is "no", then another question must be answered, "Will I abandon my investment strategy during adverse times?" If the answer is "yes" or even "I'm not sure" then a professional who can provide regular counseling to keep you on the path to investment success may make sense.
If you answer "no" to all three of these questions, then passive portfolio management is probably the right choice for you.
Could You Be Confusing Income Needs With Cash Flow Needs?
A fairly common mistake many investors make, particularly those planning for retirement, is confusing income needs with cash flow needs. Income and cash flow are not the same thing.
Put simply, cash flow is how much money you need for living expenses and other personal uses of cash. Income, however, is the amount of dividends and interest a portfolio earns that, in the case of a taxable account, you will pay current income taxes on.
It's a crucial difference, because the way you generate income can have a tangible effect on your portfolio growth, as well as on the taxes you pay, both of which impact your ability to get cash flows to cover your living expenses.
Don't Underestimate the Importance of Discipline
However, keep in mind that while passive management may sound easy, it can be very difficult to stick with the strategy during bad markets or heightened volatility.
You may be tempted to sway from your strategy and "wait out" the so-called bad times. Doing so can mean missing a big up move and seriously impact your long-term performance. Or, you may become disenchanted with merely matching the market during up-market periods. Many investors, even passive investors, find they need guidance to help keep them disciplined through good times and bad.
Whether you are looking merely for guidance or for more complete portfolio management, hiring the right manager is critical. But what should you look for in a money manager? This guide can help you more deeply understand how the person you are considering hiring approaches markets and investing.
For further details, email to 'firstname.lastname@example.org'
Mr. Sunil Kewalramani is a leading consultant on global asset management.
He contributes regularly to leading business dailies and journals.