Investment Philosophy
Timberchase Financial’s Strategic Approach to Investing
Timberchase Financial’s investment philosophy is rooted in a disciplined, long-term, balanced process that seeks to preserve wealth, minimize taxes, and help fulfill goals including legacy planning and charitable giving. We employ a methodical approach grounded in academic research, with an eye toward tax efficiency and low investment expenses.
As a fiduciary, we act on your behalf. Our fee-only model creates a pristine relationship with you that minimizes conflicts of interest.
Our Core Beliefs
The following beliefs about capital markets guide our investment philosophy:
We cannot predict the future, and attempting to guess what will happen with any investment or economic metric does not add value for our clients. The financial industry may profess to add value by telling consumers what will happen next, but history and academics have taught us that is a futile effort. To improve the outcome for our clients, we must add value in other ways.
We manage client portfolios with four major themes in mind: returns, risk, taxes, and costs. We have no control over one of these themes and control over three of them:
Returns: Investor returns are given by the capital markets, and we have no control over them. Attempting to predict which investment will do better than another is a futile and expensive exercise. In the financial advice industry, the practice of judging and picking individual stocks is often referred to as “active” or “tactical” management. We do not believe this practice is of any value to our clients. For us to increase the probability of a higher expected return, we focus on the things we can control.
Risk: We add value by working with clients to determine how much risk to take and use a disciplined approach to diversification, asset allocation, and other techniques to get a better expected return. Investors have complete control over their level of risk.
Taxes: The payment of income tax and capital gains tax erodes returns. Since investors have some control over taxes, we focus much of our attention here for our clients, not only in the current year, but also in future years and for the next generation.
Costs: Investment costs also erode returns. Reducing investment costs increases the investment return for our clients. We control investment costs by using investment products that cost a fraction of what some investment products charge. We are able to do this because we do not receive incentives or commissions from investment product providers and, unlike some advisors, do not recommend higher-cost products that are often identical.
While we do not believe that traditional stock picking is of any value to the investor other than luck, we do believe that our clients should have a target allocation, and as capital markets change, we rebalance back to the target. This process of rebalancing is a simple and understandable way to react to volatility in capital markets and remove the emotional tug to buy high and sell low. We believe the amount of risk a client accepts is tied to this target allocation and should be determined based on the client’s life rather than on what is happening in the economy. This style of investing is called strategic passive asset allocation.
How Timberchase Financial Can Help with Your Investment Goals
Because we are an independent, fee-only firm, we have access to most investment products and vehicles that exist. That being said, we migrate toward solutions that help us control risk and are tax-efficient and cost-effective.
At Timberchase Financial, we apply these principles across all of our investment strategies, whether we're managing portfolios for individuals, families, or businesses. We take a customized approach to portfolio construction, working closely with each client to understand their unique needs and goals.
Our investment team is composed of experienced professionals with deep expertise in a range of asset classes and investment styles. We're committed to providing our clients personalized, attentive service.
If you're looking for a partner to help you achieve your financial goals, or how our CERTIFIED FINANCIAL PLANNER™ professionals may be able to help with your overall financial plan, we invite you to learn more about Timberchase Financial. Contact us today to schedule a consultation with one of our investment professionals.