By listening to and talking with our clients, we gain an understanding of their goals, time frame and risk tolerance. The mission of our advisors is to work closely with each client to assure individual attention and an investment product mix that meets each investor's needs. To achieve this mission, we bring a combination of experience, knowledge, objectivity and impartiality. We educate our clients about the historical evidence supporting various investment methodologies so that they can make decisions about which ones are right for their particular situation.
Our investment philosophy is to invest in Mutual Fund Companies in an asset allocation* model that is selected for the client pursuant to the client’s investment policy statement. Mutual Fund Companies may be a wise choice for investors for a variety of reasons:
1. Mutual Fund Companies are managed by professional money managers with a multitude of research tools at their disposal.
2. Mutual Fund Companies can create a portfolio that is more diversified and less complex than a portfolio consisting of a number of hand-picked stocks.
3. Because they are designed to stay within a certain investment style, Mutual Fund Companies better lend themselves to asset allocation* for our clients.
*Strategies such as asset allocation and diversification cannot assure a profit or guarantee against a loss.
Mutual Fund investments are not guaranteed by any source and can lose money including principal invested. Note: Differing classes of shares have varying expenses, loads, fees and breakpoints. These differing classes also have time line holding periods which are appropriate depending on the investor objectives and goals.
Every portfolio has a particular asset allocation* agreed upon by both the client and the advisor. Using historical data, we determine the balance of risk and potential return that the client is comfortable with. We then generate an individualized model allocation using our risk/return analysis method.
In order to make the most appropriate investment recommendations for a client’s allocation, we use a rigorous analytical process to select investments that we believe have the maximum potential to produce results consistent with the client's investment policy.
This process utilizes software to screen for investment companies that pursue specific objectives. The list of investment companies produced is then subjected to increasingly stringent tests designed to yield a short list of ‘survivors’ that meet our criteria for possible inclusion in client portfolios. A member of our Investment Policy Committee (see discussion below) will contact the management company to assess whether its investments and investment strategies are appropriate. This discussion consists of a series of standard questions developed over years of experience which are designed to discover key facts about the investment company which we believe are critical to the selection process. Once the Investment Policy Committee member is comfortable, the selection is presented to the full committee for discussion and a vote.
Although there are many investment management methods in use today, as independent fee-based advisors, we are free to choose and utilize those methods that we feel are the best potential to meet our clients’ needs. The principles of our method ensure rigorous selection of investments to be used in a portfolio that is broadly diversified across asset classes and sub classes with an objective of generating modest returns consistently with a risk level with which our clients are comfortable.
INVESTMENT POLICY COMMITTEE
The Investment Policy Committee (IPC) is responsible for Cassaday and Company’s investment selections, asset allocation and overall investment strategy. The IPC considers current and anticipated global economic and market conditions when developing recommendations for investment selections and strategic allocation changes for all of the firm’s model portfolios. Our committee is comprised of nine members, including the firm’s six senior planning staff and three members from our Research Department. Each committee member is responsible for a portion of our model portfolios, i.e. Large Growth companies or Small Value companies. Members are charged with knowing everything about their investment sector and monitoring developments affecting their sector. We have a vigorous analytical process for selecting and deselecting investments for our portfolios, which is continually refined and evaluated by the IPC. All IPC members are held to very high standards regarding their portion of the model portfolios. Members must periodically report on the firm’s holdings in their respective asset class at our bi-monthly IPC meetings. Any changes to investment selections or strategic model allocation are decided by majority committee approval.
We established the IPC to encourage regular collaboration among our employees, a diversity of thinking and ideas, and assure that investment options and strategic decisions are vetted and thoughtfully considered before they can impact our clients’ portfolios. We believe it performs these functions very well.
Cassaday & Company’s Research and Investment Management Department is an important component of our investment management process. The Director, Adam Huke, leads a team of research analysts who work in conjunction with your financial advisor and customer service professional. Their roles include, but are not limited to:
a. Implementing the decisions of the investment policy committee
b. Researching investment companies and managers
c. Developing recommendations for new accounts
d. Preparing trades for account rebalancing
e. Recommending allocations
f. Creating and sending quarterly performance reviews
g. Researching cost basis information
h. Preparing and sending realized gain & loss reports
i. Recommending allocations of client’s “outside” investments such as 401k, 403b plans and variable annuity accounts
The Research and Investment Management Department has increased our ability to meet clients’ needs effectively and efficiently. Their work, combined with that of the financial advisors and customer service professionals, helps us to deliver the comprehensive service that our clients expect.