Whether you are an Individual, Family Office, Business, or other institution the approach will obviously vary, but the core themes remain constant.
OCM strives to consider the total picture and take a holistic approach with investment advice. Initially just identifying or recognizing specific issues and goals important to each client is the first step. When working with individuals, it’s important to consider other issues, other than just an investing strategy. Many items can and will influence successful investment planning, some are less obvious, but can often be more important than just where and when to invest. Specifically, estate issues, efficient wealth transfer, trusts, and wills can all have a significant impact on a family’s “returns”; often more so than any individual investments performance.
Additionally, where appropriate, using a version of a core & satellite investing strategy, the goal of this strategy can be described as a mix of index and active fund management. Core & Satellite aims to combine the best of both investing approaches. This approach marries together two or three different investment “buckets”. In the Core strategy, investors keep a large percentage of their investments strategically diversified and less actively managed. This helps keep costs down and encourages a longer term approach. Some satellite strategies deal specifically with shorter or intermediate term liquidity requirements, the focus here is on client cash needs from three months to two years. This first satellite will typically contain highly liquid, highly rated, short-term securities like treasury bills and notes. The second satellite introduces a controlled method of pursuing outside investment ideas. This is guided by each individual clients situation and specific risk tolerance. Collectively this approach can help align the most appropriate investment strategy with your particular needs and goals.
An important and often overlooked scenario is career risk. It’s important to consider, before investing, the source of the primary breadwinner’s income or occupation. As an example, perhaps a strategy or model, with a certain level of real estate exposure, has historically performed well, but it still may not be appropriate for a Real Estate executive who has significant exposure to that industry. Additionally, clients may accumulate other compensation, pensions, or profit sharing from a company so wealth concentration becomes highly focused. It’s then appropriate to consider whether specific investments are too highly correlated to the specific industry or occupation of the primary breadwinner. Once wealth is accumulated the goal is risk reduction first and foremost.
Investing involves risk including the potential loss of principal. No investment strategy including diversification can guarantee a profit or protect against loss. Past performance is no guarantee of future results.
This communication is strictly intended for individuals residing in the states of Pennsylvania and New Jersey. No offers may be made or accepted from any resident outside the specific state(s) referenced.