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3023 East Copper Point Dr. Suite 106 Meridian, ID 83642
Office: (208) 466-1971

 

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INVESTMENT SOLUTIONS

Each client’s investment portfolio is governed by a customized Investment Policy Statement which guides portfolio positions and management towards an absolute return benchmark over inflation (as measured by 13 week Treasury Bill interest rates). This is vastly different than a relative benchmark such as the S&P 500 index which, during times of market stress, often dips into negative returns. The absolute margin benchmark is determined jointly by our clients and us, according to various factors such as investable assets (both present and future), investment time horizon, and the ultimate dollar value of our client’s goals. While we acknowledge the risk/return trade off (sometimes referred to as equity risk premium) present in traditional, asset-allocated portfolios, this concept is used sparingly in our portfolio management system.

While we have no proprietary products, we do pride ourselves in our proprietary, client- centered portfolio management system. Ultimately, our goal is to assist our clients in moving towards their investment goals steadily and with minimum volatility with respect to their specific target end amounts. Generally, we manage portfolios in an opportunistic mode, which lends itself well to seeking absolute returns. Additionally, we maintain the flexibility to act defensively to protect portfolio value (and future income targets) through various hedging techniques. In our experience, equal importance can be given to being invested on the majority of days when markets move up AND being out of or short markets when they move down. By closely following trends rather than trying to predict market movements or simply staying fully invested, we seek realistic upside capture while minimizing drawdown during periods during sideways or negative market conditions. We understand that as investment time horizons contract toward the end of the plan, we build in a “glide path” that allows for conversion from accumulation to “decumulation” (spending money from the portfolio).

Recent U.S. government associated spending has created a tax environment that can create a drag on net portfolio returns. We manage non-retirement plan assets to minimize the return-reducing effect of taxes. Additionally, investment denominated in non-U.S. dollar currencies are commonly incorporated into portfolios to provide dollar-hedgedreturns.

  • When possible, we prefer to use strategist driven investment management, and we are comfortable outsourcing that function. Doing so enables us to perform higher level, above-the-line due diligence and client service deliverables. Common investment vehicles used in portfolios we (and those we hire to assist us) manage include:
  • Mutual funds (we like prospectuses that give managers great flexibility rather than constraining them to stay fully invested)
  • Individual securities such as stocks and bonds
  • Exchange Traded Funds
  • Variable and Fixed Annuities
  • Options to generate income or obtain favorable pricing on purchases and sales of securities
  • Inverse securities which are designed to appreciate when the underlying securities fall in value (sometimes referred to as “shorting”)
  • Securities tied to commodities and currency price movements
  • Traditional banking products such as certificates of deposit and money market accounts
  • Principal Protected Securities
  • Cash Value life insurance, when appropriate

Integral to the success of any relationship is communication. We work with each client to develop a set of “deliverables” that includes a mutually agreed upon number of face-to-face investment portfolio reviews (in addition to or in conjunction with broader, comprehensive financial planning reviews) per calendar year. Our reporting systems are available to our clients on demand through the internet and we produce and distribute consolidated quarterly reports. Another common deliverable for many of our clients is our assistance in managing the investment options and contribution levels in their company retirement plans. In order to maintain transparency we do not take custody of assets and use only third-party reporting systems.


 



Internet communications pose special licensing problems because of the accessibility to the public across jurisdictional lines. A rep-advisor is not permitted to make any direct communication with a prospective client unless the rep-advisor is appropriately registered in that prospective client’s state. For this reason, each website must have the following disclosures:
Investment Advisory Services offered through Investment Advisor Representatives of Cambridge Investment Research Advisors, a Registered Investment Adviser. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC, to residents of: Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Kansas, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Mexico, Oregon, Utah, Washington, Wisconsin. Cambridge and Cornerstone Financial Planning, LLC. are not affiliated.