Investing without a discipline is like sailing without a chart. Or a rudder for that matter.
Markets are so contrived that an investor can be fooled by good fortune into believing that he or she is secure. Until the worm turns.
The Farragut Premise:
The Avoidance of Severe Losses, rather than Outsized Returns, determines investment success over a full market cycle.
Our clients are investing for a purpose, most often to ensure a dignified retirement for themselves or their employees. We find they are best served by an approach that emphasizes real returns (net of inflation), with an emphasis on consistancy, rather than heroics.
We begin with a sector-agnostic baseline, typically underweighting the more popular industries (i.e. Tech - 1999, Financials - 2007), in which a "sector-neutral" or "broad-index" investor would be compelled to be heavily invested. Final weights are based on a Long-Term Secular Outlook that we develop and adhere to, usually over a multi-year term.
Among our investment vehicles are Exchange-Traded-Funds (ETFs), both index-based and closed-end funds. The transparency and liquidity of these instruments permit the construction of portolios our clients find easy to grasp and easy to follow.
Risk management is accomplished initially by careful weighting of regions, countries, sectors and industries, and then through periodic rebalancing of the portfolio. This discipline of maintaining balance, rather than running up all sail 'til the sqaull hits, creates a portfolio that is better suited for most investors.
Planning Process
There should be no qualitative difference in the advice given the recipient of an IRA Rollover and that given the Trustee of a multi-million dollar endowment or corporate retirement plan. While additional bonding and documentation requirements may arise in the institutional space, our clients have found our process both accessible to the disengaged and assuring to the fiduciary.
For Individuals and Families, we start with a thorough review of your various assets, debts, accounts, policies, and tax returns. We then assess your income, current and projected. Having inventoried your current financial state, we can have a constructive conversation about what remains to be achieved.
In addition to enabling the development of an Investment Policy Statement, this process will show us where the services of Legal Counsel and Insurance Advisory would be helpful.
Corporations and Trusts (including ERISA plans) are served with a similar approach. A material difference is our more formal process of identifying and documenting for you, the Fiduciary, what steps are being taken to satisfy your duties as Corporate Steward.
Ethics & Privacy
Your financial life is among the most intimate subjects. Should an indescretion derail your mission, the consequences can be grave. We take seriously the Fiduciary and other professional responsabilities we assume with our clients. In all cases we adhere to both Industry codes of honor and practice standards, as well as our own Ethics Policy, which is available to all current and prospective clients.
Farragut Resources - 7918 Jones Branch Drive, Suite 800 - McLean, VA 22102 - USA Telephone: 703-269-2475 or info@farragut.us.com Brokerage and Advisory provided through Capitol Securities Management, Inc, Member FINRA / SIPC Copyright 2008-2010 Farragut Resources, LLC
