Investment Strategy

Our Investment Strategy is designed to answer the following question for you:

• What process should you use to select investments which generate the returns you’ll need to sustain your optimum withdrawal rate?  
• How should you select, and manage, individual investments and your portfolio?
• How should you monitor the performance of your portfolio to make sure your actual returns match your expected returns?

These can be very difficult questions to answer, because there are approximately 339,103 different securities from which to choose, according to Morningstar.com.  There are also another 300,000 bonds, and millions of pieces of real estate to choose from.

The key, therefore, is to have a disciplined investment selection process.  We believe that this process should have, at minimum, the following characteristics:

• Investment objectives that would benefit a typical retiree
• Experience in managing billions of dollars of other people’s money
• The ability to diversify among, and within, asset classes to reduce risk
• Time tested approach with proven results
• Process is transparent
• Replicable

The investment selection process we have adopted is guided by the same procedure used by two large public pension plans, CALPERS—the nation’s largest plan--and OCERS.  These pension plans meet the above mentioned criteria.  CALPERS is the California Public Employees Retirement System.  They manage about $230 billion on behalf of more than 1.6 million state, public school, and local public agency employees, retirees and their families.  Their goal is to earn an average rate of return of 7.75%.  OCERS is the Orange County Employees Retirement System and it manages about $7 billion. Their goal is also to earn an average rate of return of 7%.

To learn more about our strategies, please go to “Investment Management”