We start by finding out as much as we can about you and your needs. Together, we will define your investment objectives through a series of questions designed to establish risk level, time horizon, income needs, and overall objective. Your responses are instrumental in shaping what we do for you, especially when it comes to investments in stocks and bonds. This portion of your portfolio holds both the greatest opportunity for growth and the greatest risk.
Since many different types of asset classes and global markets offer attractive return potential over time, superior investment returns are most effectively realized through proper asset allocation, geographical diversity, and diligent risk control. This focus on a risk-adjusted return drives our approach to asset allocation among these diversified asset classes. Identifying the opportunities and assessing the associated risks are the primary responsibilities of our investment team. Our portfolio managers build each client’s portfolio based on the team’s decisions, following the guidelines each client defines for their investment objectives and acceptance of risk. This positions portfolios to participate in upside returns while mitigating the downside risk to principal, at levels that fit each client’s needs and preferences.
At Mascoma Wealth Management, our core objectives for most clients are to:
- Preserve principal
- Minimize volatility
- Produce consistent returns
Through a continuous process of evaluating investment return and risk for global equity and fixed-income markets, our team assesses multiple-asset classes focusing on growth, inflation, interest rates, current valuations, price trends, and fiscal policies in every global market where we might invest. Utilizing a variety of independent sources and research, we can decide which asset classes to invest in and which to avoid. These classes include:
The proper equity allocation for you, our client, depends on your investment objective balanced with our assessment of return and risk potential in both U.S. and foreign stocks. We use Exchange Traded Fund (ETF) securities for all U.S. large-, mid-, and small-cap asset classes as well as for developed and emerging international markets. An Exchange Traded Fund is an investment vehicle that is priced and traded on an exchange throughout the day like a stock. ETF’s typically hold a basket of securities and most track a market-based index such as the S&P 500, Russell 3000 or EAFE. ETFs differ from mutual funds in that they can be bought and sold throughout the day and typically do not distribute capital gains. The benefits of ETF’s include broad diversification with very low expense ratios and greater tax efficiency. We use independent, quantitative research to analyze the universe of potential ETFs and rank them according to our desired metrics for valuation, liquidity, growth, performance, and spread. When it is time to select from these highly ranked ETFs for a client portfolio, we again research economic conditions to determine the best asset classes and the correct allocation options at the time we are ready to invest.
Fixed-income securities are an important part of almost every portfolio. When investing in fixed income ETFs and securities the team assesses economic factors, monetary policy, valuations, interest rates and risk. An evaluation of all durations in Governments, Agencies, Corporates and Municipals is conducted to determine proper duration for balancing risk/reward. Typically diversified duration approach is used to limit volatility to interest rate changes and ensure a consistent market rate return. We may buy individual fixed income securities but for high yield, multi sector and foreign asset classes we will only use mutual funds or ETFs.
Alternative Investment Vehicles
We may recommend investment in commodities, gold, and real estate depending on the attractiveness of these asset classes relative to equities and fixed income. These asset classes can also provide added diversification and be a source of risk control in various economic cycles. When investing in these asset classes, we also use ETFs and managed mutual funds.
Our account pre-acceptance process includes a review by a Senior Portfolio Manager to identify any asset presenting unusual needs. Any such asset that cannot be disposed of prior to transfer of the account to the firm shall be noted and a plan for its management/disposition shall be made and addressed after the opening of the account.
After the initial review, the assets of each discretionary investment account will be reviewed and analyzed each calendar year by the Senior Portfolio Manager and Managing Director to evaluate whether the assets are appropriate, individually and collectively, for the account. When clients have multiple investment accounts with the firm, it is the policy of the firm to review the entire relationship as one.
Each annual investment review shall include:
- Amount and description of investments
- Allocation of investments
- Adherence to allocation targets and ranges for asset classes
- Costs basis of the investments
- Market or appraised value at review date of the investments
- Client’s investment objective and appropriateness of investments
Our strategies and investments may have unique and significant tax implications. However, unless we specifically agree otherwise and in writing, tax efficiency is not our primary consideration in the management of your assets. If you want it to be, let us know. Regardless, in consideration of tax implications we will:
- Review all potential investment actions affecting taxable accounts before execution
- Consider short- and long-term gains and the advantage of favorable tax treatment, balanced with the importance of trades and timing
- Use a first-in, first-out selling approach in trimming positions and adjusting for account withdrawals
- Accommodate year-end, tax-motivated instructions by clients
Client-selected portfolio restrictions
We can restrict your portfolio to avoid investments that include companies that profit from:
If you desire, we can also place other restrictions on the types of investments we make and recommend. It is important to be aware that investment performance of an account with restrictions is likely to differ from that of other investment models and other discretionary accounts.
Risk of Loss
Investing in securities involves risk of loss. We do not represent or guarantee that our services or methods of analysis can or will insulate clients from losses due to market corrections or declines. Past performance is not an indication of future performance.