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Investment Philosophy

When it comes to investing, educators (and the public in general) face a nearly endless buffet of options from which to choose. The decisions can often be overwhelming! Once again, “The Law of the Farm” helps guide my thinking:

Why Are We Planting?

This may seem like an odd question, but it really is the basic starting point in investing one’s wealth. Sometimes crops are planted to preserve something. In order to stop erosion, farmers call this a “cover crop.” If you’re planting to reap a late fall crop, you have to allow enough time for the crop to germinate and mature. And then, the type of soil, the rotation of the crops, and the type of seed used all play a factor in planting success.

Determining why we are planting is a critical first step. Seeking to retire with a 35-year investment window? This calls for a seed (investment) capable of substantial growth. Even though the risk of some setbacks may be higher, you have a longer planting season. Just received an inheritance and want to purchase a home in 18 months? It might be best to keep that seed “in the barn,” as time doesn’t permit for planting and growth without inappropriate risk.

Through due diligence, we seek to determine what investments (and even what investment managers) are appropriate for a client’s given circumstance. Then, those managers and investments are paired to the client’s needs with the objective of taking the confusion and guesswork out of the process.

What's the Weather Like?

It doesn’t matter how long you have been farming or how great a farmer you are. The fact is, the unexpected can happen. Whether it’s too much rain, high winds, drought, hail or pests, unforeseen events can happen at any time.

When it comes to investing, we can’t control everything. That’s why it is critical to incorporate strategies and techniques designed to mitigate those unforeseen occurrences. People tend to not recognize a need for guidance when things are going well as “a rising tide lifts all ships.” It’s when the waters recede, however, that the truth is revealed. I believe it is prudent to “expect the best and plan for the worst.”

Hire Capable Hands

A good “hand on the farm” is invaluable! They allow the farmer time to handle other issues, such as mending fences before livestock escapes, irrigating, cultivating, and ensuring other issues that need attention receive it.

Likewise in investing, I realize it is nearly impossible for an individual in the greater Dayton area to take care of every aspect of a client’s investment needs. That’s why I’m proud to tell clients that I don’t handle all of their investment management. Instead, I have partnered with various management companies and third party money managers that can provide institutional level management techniques for individual clients’ portfolios. In this way, we aim to not only diversify through investment allocation, but also by management approach, style, and philosophy. While these good folks, in conjunction with me, watch your investments, I am provided the time and opportunity to help you stay on track.

Use the Right Equipment for the Job

You don’t plant with a Combine or harvest with a Plow. There are specific pieces of equipment for specific jobs.

In much the same way, I utilize a number of investment vehicles and approaches for specific client needs. Some individuals need a type of lower risk product to instill enough confidence to invest. Others have social concerns and would like to ensure their investments align with their beliefs and values. Some require an active management approach while for others a passive approach is more appropriate. And for many, a combination of all four approaches may be helpful.

The point is, there are no “cookie cutter” solutions when it comes to investments. You have to evaluate each situation, determine the appropriate asset allocation, and prepare an investment approach. Then, it’s important to monitor and revise the investment approach (as needed) to help maximize the opportunity for a full and bountiful harvest.