How We Invest

Our investment objective for all clients is to maximize potential return while taking a reasonable amount of risk.  We believe this objective can be met over time, which we define as five years or longer.

Volatility and declines are inherent in investing in the stock market and cannot be entirely avoided.  We believe that the best approach is to stay fully invested.  Going to cash requires two decisions – when to sell out of the market, and when to buy back into it.  We do not believe anyone can effectively make these decisions on a long-term basis.

We do not practice “traditional” asset allocation, so our portfolios are not necessarily diversified across all market sectors at any given time.  Rather, we offer diversified portfolios through “strategic” asset allocation, focusing each of our portfolios in the areas of the market that are currently out-performing, while still maintaining diversification over most sectors of the market.  In addition, whenever possible, we select managers who are able to make necessary changes in their mutual fund portfolios as the stock market evolves over time.

Our minimum account value for new clients investing in our four core portfolios is $100,000.  For accounts under $100,000, we offer a wide array of alternatives that may be more appropriate.

Our approach to investing is to structure our model investment portfolios with what we believe to be some of the best mangers available, based on what is actually happening in the stock and bond markets.  We have four model investment portfolios, which we change and reallocate as circumstances dictate.  Our clients are fully invested in these portfolios, separately or in combination, which are comprised primarily of domestic and international mutual funds.  Our portfolios are not normally managed on a tax efficient basis.

Our model investment portfolios are:

    Growth Portfolio - This portfolio is comprised of managers investing in equities whose investment style is growth.  The objective of this portfolio is to take approximately 20% more risk than the market risk inherent in the S&P 500 & NASDAQ Composite Indexes (as defined by beta, with the beta of the S&P 500 Index = 1.00) and to realize somewhat greater long-term performance than that index.

    Value Portfolio – This portfolio is comprised of managers investing in equities whose investment style is primarily value.  The objective of this portfolio is to take approximately 20% less risk than the market risk inherent in the S&P 500 & NASDAQ Composite Indexes and to realize approximately the same long-term performance as that index.

    Balanced Portfolio - This portfolio is comprised of both managers investing in equities and fixed-income and is designed for growth and income investors.  The portfolio will typically be comprised of between 20-40% managers whose investment style is growth, 20-40% managers whose investment style is value, with the remaining 20-60% in fixed income.

    Bond Portfolio - This portfolio is comprised of managers who invest in fixed-income   and is designed for the investor that wishes to invest all or some of his/her assets in bonds, both domestic and international.

We do not guarantee that the objectives of any of these portfolios will be met, nor do we guarantee future performance for the account of any client.

Clients engage our investment management services through a limited discretionary investment advisory agreement, which authorizes us to buy and sell mutual funds in a client’s account without prior approval by the client.  This agreement can be terminated at any time without penalty.

Clients receive written confirmations of all trades within a few days of each transaction, as well as a hard-copy monthly statement showing all transactions for the period and all portfolio holdings.  The monthly statements for taxable (non-retirement) accounts also include cost basis for all portfolio holdings.  In addition, realized gains and losses for the year are summarized each quarter.

All mutual funds are purchased without any commissions being paid.  We are compensated exclusively through investment advisory fees based on assets under management.  Fees are automatically debited to a client’s account based on the total value of that account at the end of each calendar quarter.  The cash necessary to pay these fees is generated by the sale of mutual fund shares in an account and held in a nominal interest-bearing money market fund.

For a copy of our RIA disclosure brochure, please contact Shehab Mohammad at (310) 475-5854.

The S&P 500 is an unmanaged stock index.  S&P 500 is a registered trademark of Standard & Poor’s Corporation.  Investors cannot invest in the S&P 500.  Past performance is not indicative of future results. 
 

Please call us if you have any questions about our firm or the range of financial products and services we provide. Our firm has a relationship with a variety of financial services companies, so if we don’t have a product or service, we know a group that does.