Philosophy and Process
PhilosophyWe believe in a simple “no surprises” approach to client relationship management. We value transparent reporting over glossy brochures, consistent performance over ratings and stars, and disciplined process over fads and trends. We measure an investment company’s value on how well they have met client objectives not on how well they have kept up with or beat out the pack.
ProcessInvestment Advisory, LLC seeks the best managers that meet our selection criteria and tracks them on a regular basis. We employ a fundamental research process to screen investment management companies that relies on a personal business relationship. To qualify, companies must demonstrate that they meet the following criteria:
Discipline: The firm must demonstrate a disciplined and consistent investment strategy that is measurable and repeatable Experience: The firm must have a management team that has worked with a broad range of investors and has a history of managing portfolios in both rising and falling markets. Performance: The firm must exhibit performance that has consistently over time outperformed their respective benchmarks. |
Investment Outlook
We believe that while the outlook on the investment industry as a whole remains healthy, investors will continue to have a great deal of anxiety about their future. Not a day will pass without media coverage or commentary about investor worries, market volatility, regulatory changes and government proposals.
For Individual Investors
- Outperformance of a benchmark is of lesser value
- Emphasis on income planning, tax optimization, and risk management
We anticipate that individual investors will retrench and interpret all investment news and information on a very personal level. The way in which investors will measure “performance” will be considerably changed. Goals will be the bellwether and the primary focus will be on personal investment outcomes such as income generation, risk management, and tax optimization. Relative performance to a benchmark will no longer be the key influencer in manager selection. Investors will seek managers who can successfully demonstrate the process they use to manage money, prove that it is repeatable in any market environment, and provide a full and transparent report on their accounts.
For Institutional Investors
- Rebalancing to align with policy
- Increase funded status of pension plans
- Search for alpha
Similarly, institutional investors are equally challenged by the current market. Funded status for most pension plans has deteriorated, portfolio allocations have shifted, transaction costs have increased and risk assumptions are now seriously challenged. As always, investment performance alone won’t be enough to attract institutional accounts. Like individual investors, institutional investors will continue to carefully scrutinize a manager’s people, process, and policies. But now, in this current market environment, institutional investors will step up their requirements and engage in a more careful examination of a manager’s performance seeking not only alpha but also evidence that they have not paid too much for beta.