Investment Philosophy

You’ve worked hard and been disciplined in accumulating your investment assets. You have plans for them- from buying a new TV or taking a trip to providing financial security as you age or an inheritance for your children. All of us would like to see what we’ve saved grow, and none of us likes to see it shrink. The ideal outcome of investing- by you, your financial professional, or someone else- would be to grow what you have without ever losing anything. We all know that isn’t really possible- that any effort to grow or even preserve money/assets comes with risk. Risk is technically the change in what you have- both gains and losses. Of course we only think of it in terms of loss. The risks we are exposed to or try to avoid are many, and varied. Inflation risk (loss of buying power), economic risk, company or sector risk, and market risk are just some of the possible types. The important thing to realize is that you can’t avoid them all. What you can do is try to manage the ones most important (or dangerous) to your particular situation.

At Todd Washburn Solutions we believe money is an important and valuable tool to provide our clients security and comfort. It’s what helps them fund their goals, take advantage of unexpected opportunities, and manage surprises. We believe that effective investing can’t be done in isolation. It starts with a well-thought-out financial plan. Through a Financial Life Plan we help our clients determine what they need in terms of resources and rates of return in order to achieve financial security. Frankly, we don’t understand how an appropriate investment allocation can be determined without doing the planning work- though plenty of “advisers” out there seem to feel they can. A positive result comes from successful integration of the planning outcomes and the investment outcomes- and making adjustments to both over time to make sure goals and resources remain aligned.

When it comes to investing and investing, we have some core beliefs:

• Risk and return are always linked- always.
• The market is, for the most part, efficient (prices reflect known information).
• Trying to beat the market, long-term, is a costly and losing proposition.
• The returns sought should align with those needed. Shooting for the moon may instead lead to sinking to the ocean bottom.
• Investment costs matter.
• Losses can be more devastating financially than missing out on a little extra return.
• Activity is not itself wisdom. Sometimes doing nothing is the wisest course of action.

Our process (click here for details) for designing, implementing and monitoring a portfolio is deliberate and careful. We don’t believe in “management by the quarter”- making changes and judging progress quarter by quarter. This is a longer-term process. While we aren’t absolute “buy and holders”, we don’t believe in chasing returns and the latest hot investment. Over time we aim to achieve your goals- both in the portfolio and in the Life Plan. It’s not a sexy process, but we don’t want it to be. It’s your financial future we’re talking about. Steady, disciplined, well-thought-out actions are what lead to success.