INVESTMENT
MANAGEMENT SERVICES
Burt
Associates, Incorporated (BAI) is a conservatively managed investment
firm. Its investment philosophy is to provide a competitive rate of
return on investments under management while significantly reducing
risk and volatility. BAI's emphasis is on protecting its clients'
assets from inflation and extreme stock market downside risk while
building wealth consistently over time.
The
goal of investment management is to achieve the highest possible
investment return, subject to a client's risk tolerance.
Burt
Associates, Incorporated (BAI)
offers an investment management service that is distinct from services
offered by other companies to pension plans, institutions, and
individuals in a number of ways. The following is a brief description
of this service.
Modern Portfolio
Theory
Studies
over the past 20 years have
shown that the overwhelming majority of portfolio performance is
attributed to the selection of asset classes and a relatively small
amount is attributable to the selection of individual securities. In
other words, the most important decisions made by the portfolio manager
are concerned with how much of his funds to invest in different asset
classes, including U.S. Treasury securities, corporate bonds, domestic
common stocks, foreign common stocks, real estate, and cash or cash
equivalents. Yet, pension fund trustees, institutions and individuals
commonly concern themselves much more with picking stocks or stock
portfolio managers than making the critical and much more important
decisions regarding in which assets to invest their money.
Modern
portfolio theory is not something
new and undeveloped. It has been used successfully by top-flight money
managers for a number of years. It is the basis for asset allocation
used by most of the larger pension funds.
BAI
utilizes modern portfolio theory in
managing portfolios for its clients. Selections of how much money to
put into each asset class are based on information provided by two
asset allocation models and by BAI's 30 years of successful investment
experience.
Personalized
Service
It
is BAI's philosophy that each
portfolio must be tailored to fit the individual needs of each client.
This is in contrast to the approach of most portfolio managers and
mutual funds, which essentially pool the assets of a number of clients
in making investments. Important inputs into our portfolio allocation
process include the risk tolerance of the client, the time frame for
the investments (i.e., at what points the client may need to withdraw
funds), the client's fiduciary responsibilities, etc. Perhaps of equal
importance is that each financial advisor is available, on a daily
basis, to assist you directly with any questions you may have.
Portfolio Balance
All
investments have cycles and the
relative attractiveness of alternative investments differs over time.
Therefore, BAI's investment portfolios are constantly being reassessed
to insure that the investments are appropriate in light of location in
the investment cycle.
Risk Control
BAI
places a great deal of emphasis on
controlling risk and preserving its clients' capital. The risk is
controlled by diversification, selecting only high-quality investments
and paying careful attention to the sources of risk that cannot be
controlled by diversification.
Fee-Only
Compensation
BAI
is compensated only by fees; no
commissions are received. This arrangement removes any incentive to
select investments based on their higher commissions or trade too
actively in an account. All investment recommendations are made as the
result of unbiased analysis. BAI has no proprietary products to sell.
Custody
We
cannot and will not take custody of
clients' cash or investment securities. These are kept in an insured
account with a registered broker/dealer or custodian in the client's
name and remain the sole property of the client. BAI cannot remove cash
or securities from the account without the client's written
authorization.
Reporting
Reporting
by BAI is focused on providing timely information on performance. BAI
reports are easily interpretable and show:
- How
well you are doing,
- Your
rate of return from the time you invested in each asset,
- Your
portfolio balance, and
- Rate
of return on an annualized basis
BAI
clients also enjoy consolidated tax reports
at year-end detailing such items as interest income, dividend income
and capital gains information.
Low
Cost
The
cost of BAI's asset management
services is quite competitive. Through a special arrangement with a
major broker/dealer, commissions paid on investment trades are about
5-10% of the amount normally paid by individuals. The savings in
commissions usually are greater than our asset management fees.
Minimum Account
Size
BAI
provides the above services to
individuals, retirement plans, trusts, corporate accounts, endowment
funds, etc., with at least $1,000,000 of investable assets.
Performance
Highlights
Balanced
Portfolios
BAI
manages balanced portfolios,
consisting of stocks, bonds and cash/cash equivalents. Such a portfolio
cannot be expected to outperform an all-stock portfolio. However, it
will incur substantially less risk volatility than an all-stock
portfolio.
BAI's
goal is to provide a superior
return over a long-term time horizon, with significantly less risk to
our clients. Our conservatively managed balanced portfolio includes
stocks (both U.S. and international), bonds, and cash. BAI believes
that the protection of the assets of its clients during periods of
adverse market conditions is equally important as obtaining strong
investment gains during favorable market conditions.
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