Pearl Wealth takes a bespoke approach to meet our clients’ financial goals. Based on what we learn from you we craft and implement an investment plan that leverages diversification, low fees, and careful due diligence to help you reach measurable benchmarks.
When a client signs on, we engage in our Client Discovery Process. This involves extensive conversations to not only understand quantitative and measurable goals (e.g., x dollars saved for retirement savings, college funding for children, reducing carbon impact in their portfolio) but also the qualitative incentives behind those goals. We discuss risk tolerance, time horizon, experience with investing and a host of other factors tailored to each client. From this discovery process, we create an Investment Policy Statement which serves as a long-term guidepost.
Elements of our consistent and disciplined investment philosophy include:
In researching investments, Pearl Wealth considers past returns in the context of management and governance. We look at factors such as expenses, track record, consistency of approach, adherence to stated principles, and performance over longer time horizons. We consider the pros and cons of investment structures, such as closed or open ended mutual funds, ETFs, individual bonds, private vehicles and other.
We broadly diversify client portfolios over many asset classes while creating a holistic investment strategy that works together for a given client. Effective diversification lowers portfolio volatility while maintaining – or, even potentially increasing – expected returns.
In selecting mutual funds, separate account managers and other investments, we closely scrutinize fees to ensure that any fees are justified in the context of expected risk and returns. All things being equal, we seek funds with fees lower than their peers. Also, as an institutional investment firm, we have access to institutional share classes that tend to have lower expenses than those available to individual investors.
Taxes can take a huge bite out of investment returns, particularly in taxable accounts. Pearl Wealth works to control taxes in non-retirement accounts by using tax-efficient investments, tax loss-harvesting opportunities, capital gains avoidance and asset location strategies. For clients in moderate to high tax brackets, we typically use municipal bonds since municipal bonds, unlike corporate bonds or treasuries, are tax-exempt at the Federal level and sometimes at the State level.
Rather than market timing, Pearl Wealth uses a disciplined buy-hold-rebalance approach. Study after study shows that frequent traders and market timers earn returns significantly lower than market benchmarks. Such investors tend to respond emotionally to volatile markets, which ultimately results in buying high and selling low. Our integration of money coaching techniques helps us guide our clients to stay the course and stay calm during turbulent markets.
To quote Warren Buffett: "The Stock Market is designed to transfer money from the Active to the Patient."