We like the steady income and knowing that someone is watching out for our needs.
Bond and bond mutual funds provide benefits that may include:
In today’s world, investors in bonds and bond funds face many challenges:
Interest rates are much lower than any time in our lifetimes. Low interest rates make it difficult to generate income from bonds, bond funds and other fixed income investments.
Statistic accurate as of March, 2021. Source: St Louis Fed
Federal funds rate is the target interest rate set by the Federal Open Market Committee (FOMC) at which commercial banks borrow and lend their excess reserves to each other overnight.
Foundation Income is the name we give to our bond and bond funds portfolio.
Foundation income is a diverse pool of fixed income and total return investments in mutual funds, electronically traded funds (ETFs) and possibly electronically traded notes (ETNs). Foundation Income uses the research of the Chartered Financial Analysts (CFAs) at Litman Gregory, plus our own investment policy committee.
Foundation Income is diverse. It may invest in U.S. Treasuries, corporate bonds (and other debt investments), foreign companies’ debt, sovereign foreign debt, foreign currencies, floating rate, fixed rate, inflation protected securities, real estate investment trusts (REITs), master limited partnerships (MLPs), and/or absolute return, among other investments.
In today’s low interest rate world, we have to be both creative and qualitative when constructing a fixed income solution.
We are both creative and qualitative when constructing our fixed income portfolio.
We believe the right way to invest is to diversify by strategy. Our team takes the time to gain insight into what decisions are being made, and why. Even more than that, we take time to understand how the decisions are being made. Various investment managers at a particular mutual fund, ETF or ETN have strengths and weaknesses. We want to find a mix of managers who are both confident and humble. Furthermore, we want access to the people making the decisions.
We work hard to find some of the best, highest conviction, most consistent investment minds in the world. Our independence gives us the ability to move quickly, without a conflict of interest, in the best interest of our clients. This process is sophisticated and has taken us decades to develop. But, for our clients, we make the investment decisions simple.
We implement sophisticated decisions simply.
We focus on our client’s personal financial plan.
For the investment policy committee, our due diligence and investment selection process is sophisticated.
For our clients, the decision is simple.
We focus on our clients’ personal financial plan. How much risk is right for you to achieve what is most important to you? What are your goals? Where are you at? And what are the gaps between here and there? Plus, we want to invest in alignment with your values and in order for you to make the most of your relationships. For many of our clients, the foundation of their retirement income is the Foundation Income portfolio.
We start with the financial metrics, including the amount of return delivered per unit of risk.
Fully understand the strategy and make sure the manager is acting with high conviction and consistency.
Determine the optimum allocation for the investments.
For our clients, this is all invisible. For our investment policy committee, the work never ends.
Mutual Funds & ETFs are sold by prospectus. Investors should carefully consider the investment objectives, risks, charges and expenses of the mutual fund or ETF. This and other important information is contained in the fund prospectus which can be obtained from your financial advisor and should be read carefully before investing. Bonds are subject to credit and interest rate risk (when rates rise, bond prices generally fall). The return and principal value of a bond will fluctuate as market conditions change. If sold before maturity, an individual bond may be worth more or less than its original cost.
To learn more about how we make investment decisions, click one of these links:
Balance the risk and reward between investments to achieve your real-life financial goals.
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Learn how we build an investment portfolio around your large equity position and help you diversify—not double-down (or worse) your risk.
Learn about how we manage incentive stock options and nonqualified stock options to help you grow and protect your wealth, reduce your taxes, and achieve your personal goals.
Learn how we carefully select some alternative investments to provide income and growth for some clients.
Learn how we perform investment performance analysis and provide our clients access to this information, on demand, with great technology.
Learn how we solve the complex problem of providing retirement income and reducing income taxes.
For some clients, an annuity may provide a safe and prudent retirement income. We have independent, expert annuity agents with a huge array of providers to choose from.
Learn how we provide retirement plan advice for our clients 401k accounts, and for employers who want to provide advice to their employees.
An initial conversation with one of our experts is always free of charge.
Our wealth management approach may be different from experiences you have had with other advisors.
We offer a broad array of events that broaden our knowledge and experiences.
The right way to invest is to diversify by strategy, remain consistent, and maintain high conviction.
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