Our Investment Philosophy

It’s important to have an investment philosophy just like it’s important to have your own personal philosophy – one you can stick with through time. We at Crimmins Wealth Management have an investment philosophy that we follow.

Here it is:

We use a highly diversified investment strategy which is derived from decades of academic research and financial and market theory. There are several key components to this investment philosophy and approach.

1. We believe markets work. The capital markets do a good job of fairly pricing all available information as well as incorporating investor expectations about publicly traded securities. Thus, we structure our investment portfolios using current market prices.

2. We believe in investing for the long term in equity markets.  The only way investors can help keep pace with the effects of both inflation and taxes on their portfolios is to invest for the long term in the equity markets which offers investors the best opportunity to maintain their lifestyle.

3. We believe that risk and return are related. Thus, we structure our investment portfolios to capture the expected additional return for taking known risks that the markets have historically rewarded investors. Therefore, we invest a measured portion in small companies and value companies across the globe.

4. We manage Webrisk and volatility for our clients by adding high quality short-term fixed income bonds as well as diversifying globally across more than 10,000+ securities in about 44 countries. In addition, we stress the importance of having a cash reserve, especially when clients begin to live on the portfolio income.

Why diversify? Because things change and at times quickly. In 1995, the CBO predicted that the U.S. federal government would be debt free by 2009. There were actual discussions on what would happen to all of the bond traders. Today, the national debt is over $18 trillion.

5. We use a third party custodian to hold our clients investments and as a registered investment advisor (RIA) we have a fiduciary relationship with all our clients which means we will always put their interest first. One key component of this fiduciary relationship is transparency, both with fees paid as well as what our client portfolios are invested in.

6. Once the portfolio is established,  we use investment policy guidelines to maintain target allocations. So during major stock market declines, such as in March 2009, we were selling fixed income and buying equities to ensure that the portfolios were brought back into alignment with the risk factors specific to the individual client.  Helping to influence their behavior by providing guidance with discipline and patience is the true value of our firm in  helping our clients invest with a long-term focus.

Some have indicated that this diversified approach is boring. Investing is not supposed to reduce your boredom. Investing is supposed to increase your wealth to allow you to maintain your lifestyle throughout your life and possibly allow you to leave a legacy. Thus, there is no need to consistently be checking your account balances which can raise your anxiety without any true benefit. Only check your account balances as often as you need and no more, especially if you work with an advisor who watches and adjusts your portfolio as needed for you.

Once you understand this investment methodology , you spend more time focusing on your values and goals and focus on the life issues that really matter. This is a profound change because all of a sudden you are not placing value on the short-term market performance – you are placing value on yourself.  That is a formative change.

It’s easy to say, but the tough part is executing and sticking to this disciplined approach. Simple but not easy.

We often discuss that we are behavioral advisors as we help our clients stay focused on their long-term plans. Short term thinking, in regards to investing, is the root of most of the investing mistakes. Listening to the “experts” who believe that they know when the markets will move will cost you a lot of money. We charge a consulting fee for understanding that the markets and their history tell us all we need to know to help our clients reach their goals.

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The foregoing content reflects the opinions of Crimmins Wealth Management and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.

About Dan Crimmins

Dan Crimmins, co-founder of Crimmins Wealth Management, is a financial coach and fee only financial planner. Have a financial question? ASK DAN


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