How do we add value to the investment management process?
Many advisory firms use only historical returns of asset classes (stocks, bonds, real estate, etc.) when developing a portfolio. We believe this is a mistake. This is similar to only looking in the rear view mirror while driving. To drive safely, you must also look at the road in front of you.
McGinley Financial Advisory adds value to the investment management process through an active asset allocation strategy. This is accomplished by taking into consideration the following:
- A forward-looking view of the markets. We make reasonable assumptions of likely asset class returns over a five to seven year period. These assumptions are based on current income, valuation levels, and reasonable estimates of growth. This means that at times we advise avoiding (or maintaining a low weighting to) assets that do not have a good expected return relative to the risk.
- Maintaining a disciplined approach regarding how assets are allocated.
- Strategies are generally implemented using low cost options such as exchange traded funds and no-load mutual funds.
- Your current situation. We review your goals and objectives, tax situation, and risk tolerance when helping you determine an appropriate asset class mix.
- Consistently searching for areas of value that we believe the market has overlooked.
A thorough analysis of both the longer term outlook of the markets and your current situation enable us to help you develop an investment policy that makes sense for you.