We utilize the same disciplined investment and investment planning approach commonly used by large institutional pension plans for the design and implementation of your investment strategy.
We are a Fee-Only Investment Advisor. This means we work only for our clients, not any investment company. We earn no commissions or revenue of any kind from the investments we may recommend for you. Our recommendations are entirely objective and intended only to benefit YOU - and no one else.
Additionally, our recommendations are made to encompass all of your financial assets and goals - not just the assets that we manage. Click here to see our sophisticated Wealth Management System in Action!
Our Investment Philosophy in a Nutshell...
Generally, we try to avoid the common investor mistakes of stock picking, market timing, performance chasing, and paying too much in commissions and management costs that typically reduce investor returns.
After determining your risk preference, the next step is to build a scientifically engineered portfolio containing appropriate market segments with dissimilar price movements - but that is only the beginning. We focus our efforts in 2 primary areas:
- 1) Minimizing the high costs resulting from active trading tactics that cause taxes, transaction costs, bid-ask spread costs and market movement costs, and
- 2) Maximizing portfolio returns per unit of risk by properly selecting which market(s) to participate in and which to avoid.
Our strategies are based upon 3 components:
- 1) Efficient Market Hypothesis: With modern technology, today's markets are generally efficient at setting proper prices. Rarely do stock-picking money managers outperform their market segments for very long - especially without incurring more risk. Even more difficult is trying to pick those managers who may outperform - in advance. Investors enjoy far higher success rates by owning investments that seek to capture the entire returns of each market segment - at the lowest possible cost, and with the least tax impact.
- 2) Three Factor Model: Kenneth French and Eugene Fama's research determined which sources of risk the markets systematically reward with higher returns. By utilizing this research, we believe it is possible to 1) identify which market segments should be held, and which should generally be avoided or underweighted, and 2) calculate an expected return in a portfolio that is to be held over a reasonably long period of time. Click here to see more information on the Three Factor Model.
- 3) Modern Portfolio Theory: MPT is a Nobel-Prize winning investment theory which allows investors to construct portfolios designed to maximize their expected returns for their specific risk preference. PARAGON portfolios typically use anywhere from 8-20 different asset classes, depending upon a client's risk tolerance. A detailed overview of Modern Portfolio Theory can be found here.
Portfolio Design and Risk Management
We will design a portfolio that meets your risk-reward criteria and explain the science behind its design. We also provide you with a straightforward discussion of reasonable expectations of your investment portfolio, including a detailed discussion on risk. As all investing involves risk, it is important for you to understand the likely fluctuations within your portfolio so you do not abandon your investment philosophy during market downturns - effectively robbing yourself of your future rewards. This is likely the most common investor mistake we see.
We typically use Exchange Traded Funds (ETF's) and low-cost, institutional level no-load mutual funds that individual investors cannot purchase on their own. Occasionally, when market conditions are favorable, we will use individual securities such as preferred shares or individual bond holdings.
Our portfolio expenses are typically one-half of the average portfolio that uses retail mutual funds. We pass these savings on directly to you and studies have shown that these savings may significantly enhance your returns over time.
We are a Fee-Only, independent investment advisory firm not affiliated with any broker-dealer or Wall Street Firm. We do not try to “sell” you any investment product. We receive no payments of any sort from any investment company. Our investment recommendations are based entirely upon objective research and a thorough analysis of your situation, risk tolerance, and financial objectives. Our primary goal is to make your money grow - as much as possible - within your stated risk tolerance and investment policy statement.
Investment Advisory Services Provided by PARAGON Wealth Strategies, a registered investment advisor.
