This is the primary aspect of my business and where I spend 80% of my time. I am not a believer in passive portfolio management. Rather, I believe markets are inefficient with pricing and thus actively manage my investment portfolio.
The great majority of my clients choose to own the same securities I own. How do I manage the logistics of this? I house a large portion of my personal investment assets at a firm by the name of Folio Institutional and most clients choose to follow suit. At Folio Institutional, I manage five primary "Folios" which I named the Global Growth, Global Income, Precious Metals / Real Assets, Holding Location, and US Treasuries Folios. It is important to note that these Folios are not mutual funds, nor is our money pooled in any manner. You own the individual securities and can view them online at anytime. In other words, if 2.2% of the Global Growth model is in Microsoft, then 2.2% of your personal Global Growth Folio holdings will be in Microsoft. If that means you own 52 shares, then 52 shares are in your personal account. If that means you own 34.32 shares, then 34.32 shares are in your personal account. When I make changes to the model, Folio Institutional’s automated system places trades in all of our accounts to reflect the model update.
While the semantics of this process may seem complicated, the key principles are:
•This enables you to own the same securities I own. Bottom line: I put my money where my mouth is. While I cannot promise or guarantee positive performance, I can promise that I own the same securities that you do.
•Our money is never commingled in any manner. You will never write a check to me. I’ll help you open an account with Folio Institutional and all money will move between you and Folio Institutional.
How then do I tailor your overall portfolio to meet your unique situation? We use general financial planning principals to decide on an allocation between the different Folios. One client may have a 50% Global Growth, 35% Global Income, 15% Precious Metals / Real Assets mix while another may have a more conservative mix of 20% Global Growth, 65% Global Income, and 15% Precious Metals / Real Assets.
Click here to see fees associated with assets managed through Folio Institutional. I personally pay the same brokerage and special fees that clients do. I do not, however, charge myself an advisor fee. I do not have any financial incentive to refer people to Folio Institutional (i.e., I do not receive any compensation whatsoever from them).
Zimbabwe Currency Display at the British Museum of History