The Highest Standard of Professional Investment Care
– by David Miner
We offer professionally managed investment solutions through a large selection of investment management firms such as Fidelity, Franklin Templeton, AGF, C.I., Brandes, and more. We also work with most major banks and insurance companies.
Solutions are implemented through mutual funds, pool funds, and separately managed accounts.
Through the years, I have learned that all investors are concerned about the same five important issues. These issues are:
Risk
Return
Service
Reporting
Fees
Invariably, each investor holds one or two of these issues as most important. Which of these issues are most important to you?
At David Miner & Associates, we address all of these issues to ensure that we offer the highest standard of professional care. We want existing clients to know that they are in a good place. We want potential clients to recognize the value and comfort in moving their investment accounts to us.
Following are brief comments on risk, return, service, reporting, and fees. Each of these topics might easily be a book on its own. If there is further detail that you would like to discuss, please let us know.
Risk is an issue which is probably least understood by investors, advisors, and the regulators that oversee the industry. Risk is multi-faceted. Every asset class has risk. Even cash in the bank suffers the erosion of inflation and taxes.
Risk can never be avoided, but can be managed. Appreciating and understanding risk is important to being successful.
Classically, risk is viewed as short-term variability (or volatility) of market value. This view allows for basic statistical measurement. We can calculate standard deviation and put a number on historic volatility. While we view short-term volatility as one important measure of risk, it is limited. For example, an investment can rapidly increase in value -- which is okay! Our concern is downside volatility.
Part of our process is to manage volatility through diversification. Mutual funds are inherently diversified because they hold many securities. When we take a balanced approach, we further diversify among stocks (equities) and bonds, not just one asset class.
We achieve diversification among equities by region (domestic versus global), sector (companies in various industries such as financial, resource, technology, manufacturing, etc.), and market capitalization (large versus small companies).
Bonds are diversified by duration (a measure of price sensitivity to interest rate changes), credit quality, issuer type (federal, provincial, corporate), region (domestic, foreign), and type (e.g.; mortgage bonds, convertible debentures, etc.)
Finally, we like to diversify among managers who exhibit differences in management style (e.g., growth versus value).
Statistically, the downside risk over a ten year period in the strategies we recommend is comparable to owning a house in the city of Toronto. Most people do not worry about the risk of owning a house. On the contrary, we expect to see the value of our houses to go up over the long term. Experience shows us that financial markets perform exceptionally well over time. We invest in professionally managed portfolios to mitigate risk and optimize wealth.
While financial markets can be frustrating in the short-term, the long-term growth potential is excellent. For that reason, we ignore short-term noise and focus on the long-term.
In August of 1979, Business Week Magazine had a cover titled “The Death of Equities”. Some investors were caught up in the noise and avoided stocks. Nevertheless, $10,000 invested in the S&P 500 index at that time has grown to over $200,000 by August 2009. Yes, there were some market pull-backs over that thirty year period. Pull-backs (or corrections) are simply great buying opportunities. We are successful by remaining calm and staying the course.
Of course, the S&P 500 is only an index, one of the many benchmarks the industry uses to compare long-term results. There are many indexes available for domestic equities, global equities, emerging markets, etc. The managers that we recommend to clients have a long-term objective of creating higher returns over their benchmark indexes in the long-term, while minimizing risk in the short-term.
Finally, returns are enhanced when taxes are reduced. We employ a number of strategies and tools to minimize the negative effects of taxes on your portfolio; including, registered plans, Tax Free Savings Accounts, capital class structures, T-SWP’s, and more.
From our offices, we define and provide service as follows:
- We provide greater credentials and experience than most financial advisors. I personally have been in the financial sector since 1975. In my career, I spent several years as a partner with one of Canada’s oldest investment counsels before branching into my own practice. I have a graduate degree in business with a focus on capital market finance. We are better capable than most in designing and implementing tax efficient investment strategies.
- We initiate client contact if there is a material change to an investment (e.g., change in investment mandate or manager).
- We offer periodic face-to-face portfolio reviews.
- We provide a web site and newsletter.
- We are available by toll-free phone service throughout North America.
- We can set up monthly savings plans or tax efficient monthly withdrawal plans.
- We help arrange loans for RSP deposits and leveraged investment strategies.
- We arrange group and corporate savings plans.
- Ad hoc withdrawals are easy and at no charge by us. Cash can be electronically transferred to the client bank account within a few days.
We send clients consolidated statements on a quarterly basis. Clients can also log into our system via the Internet 24 hours a day to review their portfolios.
Fund companies also send statements either quarterly or semi-annually and also offer Internet account access.
We offer service on a no-load basis. Clients do not pay to purchase, redeem or switch between funds. Even traditional load funds are purchased without a load (or commission). We derive revenue solely through the service fees paid to dealers from existing management fees on funds. We try to avoid fees and commissions to clients wherever possible.
All mutual funds have management expenses which are calculated daily into the price of the funds. Higher management expense ratios detract from investor returns. The recommendations we make typically have below median expense ratios. We also avoid recommending investments where the managers are paid a bonus at additional cost to investors.
Reducing your costs, all else being equal, enhances your wealth over time.
Please note …
- Regulation requires a short-term trading fee on fund redemptions, other than money market, within the first 30 days of purchase. The purpose of this regulation is to discourage a day trading approach to funds which detracts from the best interests of long-term investors.
- We try to accommodate investors with existing funds purchased under a deferred sales charge arrangement prior to working with us. In most cases, we try to avoid redemptions until the deferred sales charge expires. We often switch between funds within the same fund family in these circumstances at no charge to the client.