Contact Troy Sapp, CFP®

Commencement Financial Planning LLC
611 North Fife Street
Tacoma, Washington 98406

Email: tas [at] commencefp [dot] com

Phone: 253.820.6432

Fax: 253.883.4042

 

 

There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is a third type of investor - the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.


~ William Bernstein,
The Intelligent Asset Allocator

Investment Philosophy

Attempting to time the market is not an effective means to attain your investment goals. Instead, a well thought-out and disciplined portfolio management process should be implemented to optimize the probability of success. Without such a process investors often make damaging decisions based on false overconfidence or panic due to short-term market fluctuations.

One recent study found that attempting to time the market has alone caused the average investor to lag even average market returns by a full 1.5% per year, while a disciplined investment process has been shown to add an additional performance. According to the most conservative estimates, the lack of a disciplined process alone is costing the average investor 2-2.5% per year, while others estimate that the average investor does even worse!

 

 

In contrast, Commencement Financial Planning LLC adheres to an investment philosophy which provides a solid foundation to assist you prudently manage your investments according to your time horizon, goals, and risk tolerance.  This philosophy is based on a collection of fundamental principles proven to greatly increase the probability of your success.

More information regarding investment strategy and process can be found here.

The following principles have been adopted as the foundation of our investment portfolio management process:

  • You should understand your investment strategy and how various investment vehicles complement it. If a you don't understand how an investment complements your overall strategy, you should either gain that understanding or not own it. 
  • You should properly assess your risk tolerance. Properly assessing your risk tolerance will allow construction of an investment portfolio with characteristics commensurate with your goals and atttitude toward price volatility.
  • You should develop a saving and/or withdrawal program best suited to meet your goals.  Without such a program, meeting your goals is left largely to chance. 
  • You should properly diversify. Markets have historically been quite volatile and erratic over the short term. Consistently predicting which asset classes will outperform is not possible. Instead, clients should properly diversify across asset classes to increase the probability of good performance during any market environment.
  • You should be fee aware. Fees are a major impediment to long term investment performance. Fees can be greatly reduced by utilizing low-cost mutual funds and ETFs while limiting transactions to only those that make economic sense.
  • You should be tax aware. Though taxes are inevitable, strategies should be implemented to maximize after-tax returns.
  • You should occasionally rebalance your portfolio to its strategic allocation. Appropriate rebalancing ensures a portfolio's risk and return characteristics remain consistent over time.
  • You should have an investment process only as complex as necessary. Investing needn't be complex and should always be transparent. Complexity and/or lack of transparency can greatly reduce your probability of success.
  • You should develop and adopt an Investment Policy Statement (IPS). A well constructed IPS not only creates a disciplined process necessary for proper portfolio management, but also serves as a report card with which to measure progress and make necessary adjustments over time.
 
Contact Troy to schedule a no-cost, no-obligation initial consultation. If there's a good fit, we can talk about working together to take the worry out of your finances and help you achieve true financial well-being.  

Contact Troy Sapp, CFP®

Commencement Financial Planning LLC
611 North Fife Street
Tacoma, Washington 98406

Email: tas [at] commencefp [dot] com

Phone: 253.820.6432

Fax: 253.883.4042

 

 

There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is a third type of investor - the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.


~ William Bernstein,
The Intelligent Asset Allocator