Steer Clear of Impulse Decisions that Could Reduce Your Long-term Gains
What does emotion have to do with investing? Much more than you might think. When markets are booming, greed can take over. Likewise, when the markets are experiencing a correction, investors can become fearful of what the future holds. These emotions cause investors to make impulse decisions that can negatively affect long-term investment gains. The result is billions lost in returns by investors as a group.
Our job is to discourage emotional decisions by our clients. It is very tempting to hop on the bandwagon and join the latest craze hitting Wall Street. However, this is not the best way to help you realize your goals.
Arcadia's investment philosophy is anchored by time-tested principles widely accepted in academic circles and the investment profession. We replace emotion, stock picking, market timing, and investment fads with a focus on your risk tolerance, need for income, and time horizon. We design a personalized investment strategy with a diversified approach to serve as a road map to achieve your objectives.
Increase Your Likelihood of Success with Proven Strategies
Arcadia’s approach to investing was founded in academic findings over the past 70 years, and will continue to be so in the future. We don't buy into the Wall Street marketing machine. Instead, we are guided by Efficient-Market Hypothesis (EMH) and Modern Portfolio Theory (MPT).
EMH, one of the most influential economic theories (it won the Nobel Peace Prize in 1992), argues that it is impossible to consistently “beat the market”. It affirms that all publicly available information is already reflected in the value of any asset, thus consistently uncovering securities whose real value deviates from its market value is highly unlikely. Competition from millions of investors seeking the highest risk-adjusted return on their capital quickly drives prices to their fair value. Therefore, searching for undervalued stocks, predicting market trends, and market timing strategies are pointless.
MPT considers the relationship between risk and return when designing overall investment strategies seeking to create the most favorable portfolio performance. Given the investor’s risk level individual portfolio’s can be created to maximize expected return for that level of risk. MPT is the gold standard for sensible diversification and is widely accepted throughout the world.
Our focus is to create a personalized investment strategy that is diversified across multiple asset classes, secondly minimizing fees and transaction costs, and maximizing your after-tax returns. By utilizing proven academic principles, your portfolio has a higher likelihood of success over trading-intensive and fad-chasing approaches promoted by Wall Street, whose goal is to generate as many trading fees and commissions as possible.
Keys to Your Success
We are passionate about helping you reach your financial goals. With our combined years of investment experience, we have the expertise and wisdom to invest your money effectively. We use the following strategies to negotiate the ups and downs of the financial markets for successful long-term investing.
Getting to Know You
Listening to you is our priority and the first step toward managing your investments and achieving your financial goals. Whether planning for retirement or college for a loved one, it is vital for us to know your timeline and purpose of your investments. Long-term relationships based on trust and integrity are the foundation of our business.
Because of our ongoing relationship with you, we keep listening and act when life changes occur. With consistent communication, you can be assured that your investment portfolio is designed appropriately for each stage of your life. A clearly defined investment plan that manages risk and protects you from making poor decisions will give you peace of mind and confidence. You will always know that your investments are working toward accomplishing your financial goals and objectives.
The Best Asset Allocation
Effective asset allocation obtains the highest return possible for the least amount of risk. There is no “one size fits all” formula so we customize a portfolio for your risk tolerance and time horizon. No matter your situation or goals, proper asset allocation is a key concept in financial planning and money management. We adjust your portfolio for your life situation, but never attempt to chase the latest investment fad.
In addition to managing your investment portfolio, we provide retirement and financial planning services including analysis and input regarding your other assets, debt structure, insurance coverage, and other financial decisions you will be making over time.
Holding Down Costs
Our goal is to keep fees and expenses low. Minimizing the cost of investing is one of the most effective ways to maximize long-term performance.
Reducing Tax Impact
Taxes on your portfolio impact the amount of your gains that you keep. We increase your after-tax returns by minimizing portfolio turnover, thus taking advantage of the lower, more favorable long-term gain tax rates, taking advantage of the benefits of tax-loss selling, and putting your most highly taxed assets in tax-deferred accounts.
Keeping it Balanced
Rebalancing is the process of realigning the weightings of your portfolio’s assets back to their predetermined target. Performance varies among different asset classes over time, causing some asset classes to become overweighted, while others become underweighted. We continually monitor your portfolio so that adjustments are made as fluctuations occur, keeping your long-term asset allocations consistent. Most advisors use a time based methodology and only make changes every six months or once a year. Adjusting only those assets that are causing change in your portfolio’s overall risk profile allows for a more cost effective and tax efficient portfolio.