How We Invest: Latitudes’s Collaborative Investment Approach
At Latitudes Financial Strategies we have developed a collaborative investment process that helps us to create a portfolio for each of our clients that is as unique as they are. We don’t believe in using computer generated, one size fits all packages of investments. As investment fiduciaries, we design our advisory accounts to utilize our vast experience and expertise to create a portfolio that is representative of your long-term goals, your values, and your unique situation. How do we do it?
- We start with you. We ask you a lot of questions. Not a just form to fill out, or computer boxes to check, but real human interaction, remember that? We want to know your goals, your past experiences, we invite you to start with a story, your story. Our point of view is this: How can we be trusted to manage your assets if we don’t know you?
- Are You an Investor or a Saver? There’s a difference, and because of current economic conditions, the line between saving and investing has been blurred. We use a comprehensive software program to help determine your personal appetite for risk and volatility. Until we know your story and help you find a Risk Number, we won’t recommend even one investment. Not one.
- Cash Flow? Do you need money every month from your investments? If you do, we use our Bins and Gaps Method of income management (featured in Rick’s book, The Retirement Dilemma) to create an income stream designed to last over your lifetime. If you don’t need cash now, but somewhere in the future, we can plan for that, along with planning for required distributions from your retirement accounts, and even how to make the right Social Security Distribution.
- A Comprehensive Financial Plan: We think that our software is amazing, if we do say so ourselves! Our clients get their own web portal to view their current plan and our financial plans take into account everything from real estate holdings to life insurance.
You’ll notice that we haven’t talked about investing yet. That’s because we believe that investments are tools, and we don’t know which tools to use until we’ve done the engineering and the initial blueprints. If you only have a hammer, the old saying goes, everything looks like a nail. Well, we don’t just have a hammer, we have a multitude of investment tools, as independent financial fiduciary advisors, we are free to help you select the most appropriate tools. So, our first 4 steps have helped to define the project, now comes the fun part, how do we invest? Here’s some of the things that we consider as we design your personal portfolio:
- Stocks, Bonds, Other? Your risk number and time horizon will help us to determine your asset allocation. We monitor this allocation religiously and re-balance based on your feedback and our outlook for the markets.
- Taxes: We strive to maximize your tax efficiency by making the appropriate type of investment in each of your accounts based on your income tax situation, now and as we project it into the future.
So, what do you recommend? When it comes to selecting equity positions, here are some of our guidelines:
- We remember that stocks represent actual businesses, they aren’t just stock symbols to be flipped like trading cards. We believe in buying shares of businesses that are expected to someday represent a higher price. We give them time to grow, we monitor them, and we often hold our positions for a long time.
- We like businesses with strong cash flow. We like companies who take in more money than they spend- that’s common sense, right? A business is supposed to show a profit.
- We like entrepreneurial companies. As Babson professor of economics Joel Shulman asks, would you rather invest in an entrepreneur or a bureaucrat? A good measure is this: is a company creating jobs? We aren’t interested in corporate pillaging by executives, companies who destroy the environment or other types of bad citizenry. We like new ideas, solid management, and a long term point of view.
- Social Awareness: We believe that corporations are responsible to stakeholders other than their shareholders. We look for companies that treat their employees, their customers, their communities, and the environment with honor and integrity.
- We Aren’t Isolationists: We believe that good ideas, products, and companies may come from almost anywhere on earth and we like to be in position to participate in the global economy.
- We Are Leary of The Crowd: Usually, when everyone is talking about an investment idea it’s a little late. Remember the dot-com bubble? Today, whether it is marijuana stocks or some other idea of the month, our discipline helps us to avoid investment fads.
- We Like Growth! We live in the most technologically advanced age in history. New disruptive technologies like robotics, artificial intelligence, immunotherapy and blockchain are changing the world in which we live and we look for investment opportunities with the most promise.
- Diversification: We don’t like to make big bets on any one issue or sector.
If you’d like to talk to us about our unique and customized approach to investing, we’d be happy to see if we are a good match. Latitudes Financial Strategies is unique in our creative, collaborative and transparent approach to investing. Why would you have it any other way?
The opinions expressed in this material are for general information only and not intended to provide specific investment advice or recommendations for any individuals.
There is no guarantee that a diversified portfolio will enhance overall market returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure profit or protect against a loss.
Stock investing involves risk including loss of principal.
IMPORTANT: The projections or other information generated by Riskalyze regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Your Risk Number provided is on a scale of 1 to 99, with higher numbers indicating higher risk tolerance. Scenarios illustrated are hypothetical and not representative of any specific investment or investor. Individual results will vary. Investing is subject to risk which may involve loss of principal. No strategy assures success or protects against loss.