OUR INVESTMENT APPROACH
Others can make investment decisions based on hunches, trends or the whims of Wall Street. At Alliant Wealth Advisors, we are dedicated to a responsible, disciplined approach based on clear evidence of how gains are maximized and risks are minimized.
HEEDING THE EVIDENCE OF WHAT WORKS
Academic studies, borne out by plentiful experience, make the foundations of successful investing clear. They include:
1. Global diversification: Portfolios composed of a diverse mix of asset types have historically produced higher returns for a given level of risk than undiversified portfolios. At Alliant Wealth Advisors, we also heed the evidence that shows a global investment approach improves a portfolio’s risk/return profile. Rarely does a single global market consistently perform among the best—which is why it makes sense to remain patiently diversified across a number of countries.
2. Broad asset allocation: The greatest determining factor of comparative investment performance is asset allocation—how your money is divided among different asset categories. It is critical to not only design an effective asset allocation but also to maintain it. This requires a patient, disciplined approach that most “active” investors do not embrace.
3. Effective implementation: Once a portfolio is designed, it’s important to populate it with funds that accurately and consistently express that design. And because after-fee returns are paramount, low-cost funds are important. We use the most effective, lowest-fee investments from respected names such as Vanguard, BlackRock (the company behind iShares ETFs) Dimensional Fund Advisors, JPMorgan and others.
4. Proper rebalancing: Rebalancing an investment portfolio involves selling the asset classes that have performed best and buying those that have underperformed. This restores a portfolio’s original balance and ensures that it will remain in line with an investor’s tolerance for risk. Rebalancing can also create a “return premium” by regularly selling high and buying low.
MINIMIZE RISK TO MAXIMIZE RETURNS
Lower portfolio volatility doesn’t just help you sleep better at night—it leads to superior returns. It’s a mathematical fact that of two portfolios with the same average annual return, the one with less volatility will have a greater compound rate of return.
We focus on designing portfolios with the least possible volatility. Why? Because lower volatility leads to better real returns—and real returns are the key to reaching your financial goals.
SMALL DIFFERENTIATORS, LARGE IMPACT
Especially in muted markets, it’s essential to minimize both fees and taxes. Doing so can boost real returns significantly over time. For example: Suppose you invest $100,000, earn 6% returns each year, and faithfully re-invest those returns. After 30 years, if your investment costs were .9%, your account would be worth about $439,000. But if your costs were .25%, your balance would be approximately $533,000. That’s a difference of more than 21%.
Along with using low-cost investments, we also focus on tax-efficient investing. We minimize trading within taxable accounts, where it can trigger significant tax consequences. And we use tax-loss harvesting to neutralize the taxes from realized gains. We also guide investors in taking distributions from their tax-advantaged accounts in order to minimize tax impact and keep money growing as long as possible.
DISCIPLINE AND CONFIDENCE
At Alliant Wealth Advisors, we custom-design portfolios based directly on our clients’ goals, comfort level with risk and timeline for achieving their objectives. And we invest with patience, discipline and a willingness to heed the lessons of the market. Your wealth is too important to invest any other way.