At Unconventional Investor (UI), our sole goal is to maximize clients' after-tax, after-fee long-term investment return. There's certainly nothing novel about that; all investment advisers should have that objective. Each client is provided a custom portfolio allocation reflecting their unique life situation, risk tolerance and time horizon. Again, nothing radical, just sensible portfolio construction. But perhaps unusually, we focus transparently and independently on each element of portfolio return. Remember, the investment return that investors actually receive is the net result of two things, expressed here as a formula:
Net Investor Return equals...
Gross Portfolio Return less Expenses and Taxes
Briefly, UI's approach to each element:
Gross Portfolio Return
Our approach to maximizing portfolio return is firmly grounded in a rational and disciplined approach. Studies show that gross portfolio return is nearly exclusively determined by asset allocation. Other research on stock picking and market timing shows that investors, professionals as well as amateurs, make more mistakes than wise decisions over time. And most importantly, repeated studies show that equity index funds offer superior performance for maximizing stock market performance.
Given this landscape, UI uses a strategic asset allocation approach, centered on a thoughtful collection of low-cost equity index funds. US Treasury bonds, Inflation-protected US Treasuries (TIPS) and cash are used to reduce volatility and generate income. Learn more about UI's investment strategy, why it makes sense and how it avoids the common pitfalls of stock picking and market timing.
Minus All Taxes, Fees, Expenses, Commissions
While strategy may be the interesting part of investing, investors are well-served to be vigilant about minimizing expenses and taxes. The financial sector has innumerable fees, usually partially or completely obscured. Due to this limited transparency, few investors realize how much they pay in fees. Studies have shown that most investors pay close to 2% in total fees, and the majority of these fees are entirely avoidable. Fewer still realize the severe negative impact these fees have on long-term portfolio performance. The importance of compound interest simply cannot be overstated; click here for a quick primer. Our entire business model is predicated on cost minimization. This commitment to low fees is reflected in our low overhead, which results in savings passed along to clients. And in the interests of transparency, our fee structure is clear and offers low fees and low minimums. Learn more about our ultra low fees, as well as our approach to minimizing fees and taxes in client portfolios.
Equals Net Investor Return
The number that matters - after-tax, after-fee return. Contact us to learn more about a portfolio centered on equity index funds plus a relentless focus on expense minimization. It is a boring and incredibly effective approach. Click here for this in a pdf.