The Art of Investing
Successful wealth management blends the science of risk versus return with the art of informed decision-making. As a high net worth Evermay client, your customized portfolio will be a product of both.
Asset Allocation
We strongly believe that the most important aspect of investment planning is the asset allocation process. Research has shown that the decisions upon which a client’s allocation is based account for the majority of the variability in portfolio returns. Therefore, we rely heavily on our expertise and market knowledge, as well as on proven asset allocation modeling and methodologies, in making these choices. Our goal? To create a diverse portfolio that consistently delivers the highest possible after-fee, after-tax return for your particular level of risk.
Alternative Investments
In certain cases, incorporating alternative investments into your portfolio mix can serve to increase diversification and reduce risk. These include managed futures, long-short hedge funds, absolute return funds, real estate and private equity. We also can create customized fund of funds to meet specific risk and return objectives. In pursuing these strategies, we look for consistent returns high enough to justify investing in a non-traditional asset class, volatility approximating that of bonds and low correlation to equity markets.
Manager Selection
Manager selection is another critical component in the design of your investment program. We employ a five-step evaluation process, which includes both quantitative and qualitative analysis, designed to identify superior managers that we believe are representative of a given asset class and have a high probability of repeating their excellent historical performance. We are in regular contact with managers and monitor their performance to ensure that they continue to provide consistent value and returns.
Equity Selection
As in-house portfolio managers, we employ both top-down and bottom-up techniques in constructing your portfolio. Our top-down approach includes the analysis of macroeconomic, geopolitical and capital market conditions, business regulations and industry developments. With this data in mind, we select equities based on their long-term total return potential and ability to pass our fundamental and technical analyses. Once we invest in a company, we continuously monitor its business fundamentals and stock valuation.
Fixed Income Management
We select fixed income investments based on their investment grade, liquidity, duration and yield to maturity. If taxes are not a consideration, we primarily choose investment-grade securities issued by financially sound corporations, and by the U.S. government or its agencies. If you are subject to higher income tax rates, as many of our clients are, we utilize high grade, tax-exempt state and local bonds.
Asset Management
Constructing your customized portfolio, with the right mix of asset classes, a balance of growth and value approaches and the implementation of active and passive management, is only the first step in your wealth management program. Once that is established, we closely monitor your portfolio performance with a combination of analytical tools and insight gained through immersive research. Should specific asset classes over- or under-perform, cash flow fluctuate or your goals change, we rebalance the portfolio accordingly. We do not engage in tactical rebalancing, as this may lead to market timing or unnecessary taxes or transaction costs.
The Relationship Factor
All of the recommendations we make in regard to your wealth management are based upon our knowledge of your goals, your lifestyle and your financial needs. It is the reason we choose one manager over another, or weight your portfolio more heavily in one asset class than another. We believe the relationship we forge with you is a critical factor in the ongoing growth of your portfolio, as critical as our depth of experience as financial professionals, our market-tested methodologies and world-class research.
The art of experience and insight. The science of investment and outcome. The focus on you. That’s the Evermay approach to investment management.
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