INVESTMENTS

investments

Stewardship advises only on no-load Mutual Funds and Exchange Traded Funds (ETFs).  Clients are encouraged, but not required, to open accounts at Vanguard.

The media often gives mutual funds a bad name, but that criticism usually doesn’t stand up to scrutiny.  Mutual funds offer tremendous diversification and professional management.  No-load funds have no sales commissions.  Using publically available information, Stewardship determines if a fund manager has a track record of beating their benchmark after expenses.  Yes, there are managers with track records of beating their benchmarks.  We choose the best of those who do.  When none exist for an asset class, we recommend an index fund.

Stewardship does not engage in market timing.  We don’t think markets can be consistently timed.  Instead, we work to understand your time horizons as well as your appetite for volatility vs. return.  We then recommend funds in asset classes appropriate for you.

We typically divide client’s investments into two or three portfolios, a variation of the “bucket” approach.

For short-term time horizons (usually about 5 years), we recommend investment-grade, low volatility bond funds such as US Treasuries.

Longer time horizons (5 – 10 years) are addressed with “balanced” funds, that is, funds with a mixture of stocks and bonds, and also aggressive bond funds.

For money needed in the long-term, usually 11 years or more, we typically recommend funds invested in stocks of US and developed foreign companies (small, mid and large cap), foreign and domestic real estate and emerging markets.

We only recommend funds appropriate for your circumstance.  We also work hard to minimize your expenses.  It may sound obvious, but the less you spend in fees and sales commissions, the more you can invest. Over the years, with the beauty of compounding, those additional investments can add a tremendous amount to your portfolio’s value.