1st Quarter 2016 Investment Review

The 2016 tax season will be over in three short days (that’s right, taxes aren’t due this year until the 18th), but I want to take a quick break from the work to update you on First-Quarter 2016 investment results and few other items.

Annual Tax Review

Stacy will send the official request out next week, but just a reminder that we will be asking for a copy of your tax return to help us identify planning and investment strategies that are appropriate for you. You or your tax preparer can upload the return directly to our office using this link — which is much more secure than sending a copy via email.

Investment Review

Earlier this month I posted a summary of returns across all asset classes (see https://precedentam.com/investment-management/2016-q1-asset-class-returns/). The one-sentence version would read: After a wild ride, stock were flat, bonds did well, and long bonds and gold were amazing.

Over the past one-year period, however, most investors are still in negative return territory.  And I am concerned that few investors understand the risks that are present across numerous asset classes and markets right now.

With that as a backdrop, I have carefully positioned our client portfolios in recognition of current market conditions, and the results have been exactly what we expected and need — higher returns as a result of taking less risk.

Across all of our portfolio strategies, there is not a single rolling period since the inception of our firm that we are not significantly outperforming market benchmarks after accounting for all management and advisory fees. Additionally, each strategy has posted a positive 1-year return versus the negative returns of respective market indexes.

Two aspects of our investment strategy results are particularly noteworthy:

1) At the end of February, global markets were down -6.49% year-to-date (ACWI). All of our client portfolio strategies were up during the same period. It would be hard for me to emphasize enough how important it is to preserve capital when markets fall.

I certainly don’t expect to have positive returns every time the market falls, but limiting losses is precisely how we aim to build wealth long-term.

To make an account grow, you must first learn to hold an account together. Capital preservation has priority over capital appreciation. – Peter L. Brandt

2) The Multi-Asset Strategy generated a return of +17.67% during the first quarter, net of all fees. This strategy was launched on 1/1/2015 and is an unconstrained portfolio of our best thinking.

I designed it with the intention of building wealth for clients during periods of market turmoil. So far, so good.

The Multi-Asset Strategy is appropriate for patient investors with excess cash flow. Let me know if you would like to explore integrating it into your overall plan.

Composite performance for all the accounts I manage can be reviewed at https://precedentam.com/performance/.

New Mobile Tools

A number of new tools are available through PrecedentAM.com to make your financial life a little easier. And all of them now work directly from your mobile device:

Appointment Scheduling — Scheduling a meeting or phone consultation can now be done directly from your mobile phone using our online scheduling link. Just pick a time that is convenient for you and drop it directly onto my or Patrick’s calendar.

Retirement Planning — New clients can get a basic retirement calculation on our website, even just using a phone. If requested, the results will be sent directly to Patrick so we can get started on a thorough analysis and comprehensive financial plan.

E-Signatures — We are now accepting electronic signatures for advisory agreements, investment policies, new accounts, and just about any other process that used to require paper forms. You can literally sign our forms with your finger on the screen of your mobile phone.

File Sharing — PrecedentAM has offered online file sharing from day 1, making it possible to securely view and share important information with your entire advisory team. The system can be accessed directly from your iPhone or Andriod device — just download the Citrix ShareFile app and log in after we have setup your account.