How We Invest

Achieving Your Goals

Carrick Bend Advisors’ investment policy focuses on achieving a client’s desired financial goals. The distinguishing characteristics are asset allocation, diversification, tax and cost efficiency, and prudent investment standards.

Asset Classes and Diversification

We construct portfolios consisting of multiple asset classes, using securities that are tax efficient, cost efficient, and diversified.

The above chart ranks and color-codes asset class returns over a multiple-year period and represents the importance of being diversified. Predicting which asset classes will be the top performers in any given year appears to be impossible. No discernable patterns present themselves. Investing is just not that simple. The more prudent course is to create strategies based upon the realities of investing. These strategies attempt to mitigate the risks inherent in the capital markets.

Diversification is more about asset classes than about the number of stocks or mutual funds in a portfolio. An asset class is any group of investments that share characteristics but have unique risk and return characteristics when compared to other investments.

The above chart shows the returns of three asset classes, the S&P 500 (Asset A), Domestic Micro Cap Stocks (Asset B), and the Wilshire Real Estate Investment Trust Index (Asset C). Also shown is an equal weighted portfolio, rebalanced annually, of all three asset classes (Asset ABC). Over the shown time period each asset class performed differently.

Given the unpredictability of investment returns, we think Portfolio ABC offers the best risk adjusted returns of the alternatives shown.

Tax Efficiency

We incorporate several strategies to maintain tax efficiency in our clients’ portfolios.

Prudent Investment Standard

Carrick Bend Advisors adheres to a prudent investor standard, and we view managing a client’s portfolio as a fiduciary responsibility.

Maximizing Returns

Our strategy seeks to maximize after-tax risk adjusted total return for our clients. Our investment philosophy is based upon academic research, primarily the research of noted finance professors Eugene Fama and Kenneth French. We are strongly committed to conducting and reviewing finance research, both practical and academic, and we incorporate our findings in client portfolios.