When it comes to putting your money to work for you, at Intentional Finance we believe in long-term investing and straightforward, time-tested strategies, rather than following the latest investing fad or 24/7 media hype. Investing doesn’t need to be complicated, but you must be intentional and patient to reach your goals. The markets will work for you over the long haul, but you must stay invested to reap the benefits.
We start by creating a personalized investment policy statement that addresses the objective, risk tolerance, and time horizon for each of your financial goals, as well as any specific desires or constraints you might have for the types of investments you want to own. We also consider your needs for current income or liquidity, and the potential tax implications of your situation. We develop a coordinated investment strategy for all your assets, including accounts such as workplace retirement plans not held with our firm, so your assets are working together to help you reach their goals. This policy might include things like which types of assets to hold in tax-deferred accounts and which in taxable accounts, the method to be used to generating income, or plans for taking required minimum distributions. We pride ourselves on creating an investment strategy tailored to your unique situation, goals, preferences, and core beliefs.
We follow the principals of Modern Portfolio Theory, which describes the relationship between risk and return in securities and the effect of diversification on a portfolio. We allocate your investments across different asset classes, such as stocks and bonds, US and foreign markets, and large and small size companies, to achieve the optimal balance between the risk you can tolerate and the return you need to be successful. It’s our job to make sure you can stick with the plan for the long run.
We offer a range of investment approaches, including passively managed and actively managed strategies and combinations of the two. We also have options for targeted investment styles such as socially responsible investments (SRI), also known as environmental, social, and governance (ESG) investing, and investments that support particular goals such as the advancement of women in business, or green energy.
Our strategies may be executed with index funds, passively managed or actively managed mutual funds, or exchange traded funds (ETFs). Through our open-architecture investment platform we have access to a wide range of investment options including low cost institutional funds, so we can select the ones that are best for each client. Because we believe every investment company has its strengths and weaknesses, we seek out the best managers in each asset class and style of fund. We pay particular attention to costs, both fund expenses and transaction fees, and balance that against projected returns to make sure our clients always get the best value solutions.
While we do not provide tax advice or prepare tax returns, we keep current on the tax environment that may impact your investments. We always consider the tax implications of the recommendations we make, including the choice of asset location between taxable and tax-deferred accounts, emphasizing low turnover funds and managing sales in taxable accounts to minimize capital gains, balancing retirement assets between traditional IRA accounts, Roth IRA accounts, and taxable accounts to minimize taxes in retirement, and using tax-loss harvesting to neutralize the effect of gains in taxable accounts.
One of the most important things we can do for our clients is to help them avoid making costly mistakes. Two of the most common investing mistakes are taking on too much risk and then selling when the market drops, and making emotional decisions rather than following a disciplined plan. We make sure we understand your personality, expectations, and tolerance for volatility in your investments, so we construct a portfolio you can stick with. And we are always available to answer your questions and concerns and help keep you on track with your plan.
Monitoring and Rebalancing
While we advocate long-term investing, and don’t believe that trying to time the market is wise, we also don’t just “set and forget” our clients’ portfolios. We use world class independent research to keep an eye on all the funds we use to make sure they are continuing to perform as expected and have not undergone a significant change like a manager retirement. We also watch each of our client’s individual portfolios and rebalance them if market movement has caused them to stray too far from the original target allocation, potentially taking on more or less risk than desired. Lastly, we may periodically reassess our asset allocations and suggest small adjustments to many of our clients’ portfolios when we think there are changing opportunities in market.