5 Federal Street,
How to invest money — your money — is a critical part of your overall financial plan. It is intimidating for many, interesting and enjoyable for others.
At Journey Wealth Partners, we believe in smart, practical and effective investing:
Sure, you may be able to manage your own investments. But do you? Do you have the time, training and tools, confidence to ensure you are optimally engineered? Do you have the discipline and all of the above to maintain your investments each passing year, and with each job change or life change? Is your time better spent developing your career, passions and family or even exercising and sleeping?
Working with someone who shares your investing philosophy is job number one. Is Journey Wealth Partners the best option for you? Get a good idea by answering these two questions:
As you approach retirement, surprises will inevitably pop up. It is important to stay disciplined and zeroed in on those things that you can control. (Hint: The stock market isn’t one of those things.)
While some of the issues mentioned above are still in play, you need to focus on generating a “paycheck” from the retirement savings you have amassed over the years. Questions like these come to mind:
Our team has extensive experience with retirement income planning. We will segment your savings over the current, near and long terms to minimize your risk when the inevitable market volatility occurs. In addition, we will strive to match your cash-flow needs with the appropriate investments (a.k.a. liability-driven investing). All in the interests of creating a comfortable retirement for you.
To learn more about our approach to retirement planning, please contact us today.
“I’d compare stock pickers to astrologers, but I don’t want to bad-mouth astrologers.”
– Eugene Fama, Nobel Prize Laureate 2013 Financial Economics
We make our recommendations in accordance with a rational, evidence-based approach known as asset class investing, or market exposure investing. Grounded in academic research spanning countries and decades, asset class investing posits that with the right mix of investments within each asset class, you can capture the dimensions of market returns efficiently. Only by knowing where you are can you determine a path forward. In just one meeting, we can distill the evolution of the investing landscape for you so you appreciate what goes into an effective investment strategy
Think of asset class investing as “Investing 3.0” — an important improvement in the evolution of investment management. The approach is based on the Efficient Markets Theory and Modern Portfolio Theory, which earned respective founders Eugene Fama and Harry Markowitz the Nobel Prize in financial economics. The widely accepted and proven, deep body of research of factor returns is now being heavily marketed as “strategic beta.” Journey was a practitioner long before it became trendy.
Goal: Beat the market by taking advantage of pricing “mistakes” and attempting to predict the future.
Drawbacks: Precisely predicting when prices of individual securities or funds will rise or fall is very hard to get right repeatedly. Active management also incurs higher expenses and trading costs.
Goal: Mirror the performance of a particular index through index funds — e.g. mutual funds or exchange-traded funds (ETFs).
Drawbacks: Index funds tethered to benchmarks suffer from allocation drift and incur higher trading costs due to their mandate to reduce tracking error. As a result, they’re less efficient than the most efficient strategies over longer time periods.
Asset class investing
Goal: Rely on portfolio engineering rules that efficiently track the market, but with weightings of asset classes that provide greater returns over longer time periods. Evidence shows the benefits are true over time, across U.S. and global markets.
Drawbacks: At some point, every asset class has periods of lesser returns. Thus asset class investing requires discipline and patience.
Prudent investing means staying disciplined and focused on the long term, and understanding each investment’s role in your portfolio. Working with the right advisor is like creating guardrails and speedbumps to protect you from abandoning your strategy when the road ahead is rough and uncertain.
Behavioral economics explains why this is hard to do for mere mortals. It isn’t because people aren’t smart or strong. Rather, it is due to the misinformation, the nature of the media and the financial services industry’s use of fear and greed to generate trading revenue.
Benefit from staying in control and working with an experienced advisor who knows how to take advantage of the markets by not reacting irrationally. Investing is a zero-sum game; there are investors on each side of every trade. Be rational and ask us to show you the data.
We generally build client portfolios featuring low-cost, well-diversified funds from respected firms such as: