Investment Selection
Portfolio Construction
Portfolio Reviews Communication
Alignment of Interests
Investment Selection
1. Who does your investment research/due diligence?
Our Investment Team of credentialed professionals performs ongoing investment research and due diligence. Along with data analysis, research can include industry conferences, calls with management teams, and on-site visits. Potential investments are presented to the Investment Committee for approval before they are used in client portfolios.
As a supplement to our in-house research, non-traditional investments are often presented to our External Investment Committee, consisting of outside professionals in the money management and academic fields. This is to get valued outside perspective and ensure that we do not engage in groupthink.
2. Do you try to time the markets?
We do not try to time the markets, as we do not believe that it is possible to do so consistently. Anyone can get lucky once, but history has shown the futility of trying to time markets.
Our view is that time in the market is much more important than the timing of the market. Put another way, for investors in the stock market, time is their best friend.
While we do not try to time the market, we do review the markets for opportunities that might be worthwhile and risks that we might want to avoid.
3. What type of investments can I access through Bedel that I would not be able to on my own?
Institutional share classes – Mutual fund companies view us as a single investor, offering us lower-cost share classes normally available only to larger investors.
Soft-closed funds – We invest in many funds that are closed to new investors, but as existing shareholders we can still put new clients into those funds.
Alternatives – We have extensive experience investing in alternative investments, which are designed to perform differently from stocks and bonds. Adding these to a portfolio has the potential to lower volatility without lowering expected return.
Interval funds – We can invest in interval funds which offer different sources of return to investors.
Active/Passive – We have considerable experience investing in both active and passive investments.
4. If I have cash how will it get invested?
If you have a large balance of cash that you would like to invest we will create a strategy that balances the current market conditions with your long-term plan.
This plan will often involve investing the money into the market gradually, rather than all at once. We do this so as to minimize the impact of market timing. Investing the money over a period of time lessens the likelihood that the market's performance on any one given day will have a meaningful impact on your portfolio.
Portfolio Construction
1. How do I know how much risk I should take in my portfolio?
There are two components to this determination. The first is how much risk you need to take in order to achieve your goals, and the second is how much risk you can endure without reacting emotionally. Figuring out the right amount of risk is both an art and a science. One of the most important outcomes of the initial planning process is determining where your portfolio should fall on the risk scale.
2. How do you decide which investments I should own?
On a high level, we conduct our own in-house investment research and decisions are agreed upon as a committee. Your portfolio manager makes the day-to-day decisions to implement the investment strategies in your portfolio.
3. Will my portfolio be customized?
Each client’s portfolio is designed for their individual needs. We design portfolios from a list of approved investments customized to meet each client’s goals and tolerance for risk.
4. I have an investment with a very low cost basis. Will I have to sell it to invest my money with you?
We are tax-aware investors and will not force the sale of highly appreciated investments if it is not appropriate given your tax situation. Our goal is to consider the appreciated investment within the context of the rest of your portfolio and diversify around it.
5. How quickly can I access funds from my portfolio?
Most of our investment strategies provide liquidity in one business day. However we may use investment strategies that are less liquid. The level of use of these less-liquid strategies is customizable to your situation and preference.
6. Can I invest for the short term?
If you have an upcoming need for cash, we can set up a separate strategy that is appropriate for the short-term goal.
Portfolio Reviews Communication
1. How often will you review my account and make trades?
We continuously monitor the investments in your portfolio and review your specific accounts on a quarterly basis. If at any time we determine a new investment is more suitable for your portfolio than a current holding, we immediately enact those changes to your portfolio.
2. How do you decide which investments I should own?
On a high level, we conduct our own in-house investment research and decisions are agreed upon as a committee. Your portfolio manager makes the day-to-day decisions to implement the investment strategies in your portfolio.
3. Will I be notified about any changes you make to the investments in my portfolio?
We assume discretion with regards to making investment decisions for your portfolio. Clients receive communication from the custodian whenever changes are made. While most clients prefer not to be notified personally, our communication can be customized.
4. How do you communicate about how my portfolio is doing?
You can expect to have communication in different ways, depending on your preference. In-person meetings or conference calls are scheduled regularly. Moreover you will receive quarterly investment reports that provide insight into your portfolio allocations and performance of your accounts.
In addition, we also provide monthly updates through our Bedel Barometer which serves as a measure of the overall health of the economy, along with our quarterly newsletter and regularly updated blog. If there are any significant market shocks or issues that raise concern between our quarterly communication, we also provide our thoughts through email updates.
Alignment of Interests
1. Are you a fiduciary and why is that important?
We have been acting in a fiduciary capacity since our founding in 1989. This is important because, as a fiduciary, we have the obligation to act in the best interest of our clients and avoid any conflicts of interest.
2. How are you compensated? Are you fee-only or fee-based?
We are a fee-only investment firm. We are only compensated by our clients for advice and ongoing asset management. The fees you pay, which are based on the value of your investments, are assessed on a quarterly basis and can be taken directly from the portfolio.
We are different from fee-based investment firms because we do not receive commissions or any other payments from the sale of financial products. All of our revenue comes directly from our clients. Since we are not constrained by this possible conflict of interest, we are able to offer unbiased advice.
Please see this summary for further details about our fee structure.
Learn more about how Investment Management fits into our strategy for
Comprehensive Wealth Management
Schedule a Consultation
We have helped our clients answer these questions and more. If you want a clear understanding of your financial future, and need help making changes to reach your goals, schedule a consultation and we can get started.
Prior to implementing any investment strategy referenced in this article, either directly or indirectly, please discuss with your investment advisor to determine its applicability. Any corresponding discussion with a Bedel Financial Consulting, Inc. associate pertaining to this article does not serve as personalized investment advice and should not be considered as such.