Our investment management process
Investment Insights by Mike Jones
As we wrap up the investing year of 2017, I thought it would be helpful to give an overview of the investment management process I employ as the fiduciary of the life savings of so many families served by Argent Advisors.
As most investment professionals would agree, the most important decision to make is how to allocated capital along the risk reward continuum and into the various asset classes available.
Step 1: Broad Asset Allocation
Investopedia States, “Asset allocation is an investment portfolio technique that aims to balance risk and create diversification by dividing assets among major categories such as cash, bonds, stocks, real estate and derivatives (alternatives investments). Each asset class has different levels of return and risk, so each will behave differently over time.”
Step 2: Sub Asset Allocation
Although one cannot underestimate the importance of broad asset allocation, determining sub categories within asset classes and geographical dispersion of capital is vital to overall investment performance as well.
At Argent Advisors, a team of investment specialists meet once a month to complete the matrix you see below. Changes reflect the input from research we review as well as attempting to position investments congruent with the current macro economic trends.
Step 3: Portfolio Construction
Step three is where the heavy lifting comes in with respect to building portfolios.
Once a broad asset class and sub asset class has been defined, our investment management committee must vet countless possible investment vehicles which represent these categories. At this juncture research and experience is critical. Our committee must determining if low-cost index solutions fit or if more expensive yet active solutions potentially create more value. Eventually a choice must be made. Then that investment must be closely monitored. Decades of experience and knowledge are utilized vetting and selecting each investment selected in building your portfolio.
Step 4: Daily Monitoring
As both a portfolio manager and a fiduciary, I am responsible for “minding the store” with respect to my clients’ money. In many cases I build models to correlate to the portfolios of my clients. I use specialized software which allows me to monitor the performance of those portfolios. The purpose for this daily monitoring is to keep a close eye on the behavior of investments and to be ready to make adjustments if and when long-term trends are violated.
I always have a less risky portfolio B waiting in the wings. When conditions justify making a move, I intend to make subtle portfolio adjustments which remove some of the risk exhibited in a client’s account. The chart below is an illustration of one such portfolio (red line) with its corresponding less risky alternative (green line) as well as a benchmark (gray line).
For those of you who have trusted Argent Advisors with you money we say thank you. It is and will always be a tremendous honor to work for you.
For those of you who would like to have a discussion about our services please don’t hesitate to give us a call.
Byron R. Moore, CFP® is Managing Director / Planning Group of Argent Advisors, Inc. Mike Jones is Managing Director / Investment Group of Argent Advisors, Inc. Write to either at 500 East Reynolds Drive, Ruston, LA 71270 or call (318) 251-5800. This newsletter is available via email on a free subscription basis. You can subscribe by clicking here. Direct any questions, comments or suggestions to Byron Moore at email@example.com or to Mike Jones at firstname.lastname@example.org.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Argent Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. The opinions of any single advisor do not necessarily reflect the opinions of Argent Advisors, Inc. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Argent Advisors, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.
Argent Advisors, Inc. is a registered investment adviser registered with the Securities and Exchange Commission. Argent Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. Argent Advisors, Inc does not offer tax, legal or insurance advice. If you are a Argent Advisors, Inc. client, please remember to contact Argent Advisors, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Argent Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.