Our Investment Philosophy
R.C. Whitmore Advisors, Inc. offers an objective lens through which to view the volatility of the stock market and cycles of the real estate market. Instead of making emotional decisions that can be counterproductive, we provide informed and objective advice from which you can make your decisions.
Functional Asset Allocation
Most financial planners and investment advisors focus on your investment portfolio and its performance against various indexes. While your investment portfolio is important, it’s only part of the picture. Your overall net worth is a much better measure of your financial well being and your ability to achieve your goals.
Functional Asset Allocation is a holistic approach to net worth management and growth. Its most basic premise is that there are three major categories of assets – interest-earning, real estate, and equities – and that each category has a fundamental function or purpose.
The purpose of the interest-earning category, which includes cash and bonds, is capital preservation. These investments protect against deflation and ensure that you will have a reliable cash flow while keeping this part of your portfolio safe.
The real estate category includes your personal residence, real estate that produces income (rental property, for example), and nonproductive real estate (including vacant land and second homes). The purpose of real estate is to protect against inflation through the opportunity to leverage your investment by mortgaging the property. It also fulfills the function of personal use and enjoyment.
Equities produce profits during times of prosperity. They are the growth engine of your net worth.
Once you understand the function of each asset category you see how questions like “Should I invest in stocks or bonds now?” are fundamentally flawed. Under Functional Asset Allocation, the three asset categories don’t compete against each other on performance or yield. The better question is “Do I have the right investments in each asset category, and am I properly balanced across all three categories so that I can achieve my goals and worry less about my finances?”
Based on modern portfolio theory, we strive to achieve proper diversification, allowing for higher returns with less risk so clients may more easily reach financial goals. Depending on a client’s specific situation, we typically recommend a diverse investment portfolio across equities (domestic and international), bonds and income producing assets, cash and cash equivalents, and real estate holdings.
Research shows that active investors, those who trade frequently in an attempt to exploit profitable conditions in the market, fail to achieve consistent returns as lucrative as those who employ a buy, hold, and rebalance approach. At R.C. Whitmore Advisors, Inc., we regularly analyze your portfolio to ensure it is balanced and taking full advantage of market trends, all the while assessing proper risk management.
Just because someone else owns an investment does not mean that investment is right for you. Depending on your goals, stage of life, and risk tolerance, R.C. Whitmore Advisors, Inc. will help you choose investment options and allocate your portfolio in a way that best suits your situation.
Every client has unique financial and life goals that require custom-tailored advice. Risk tolerance is not the only consideration when it comes to investment recommendations. At R.C. Whitmore Advisors, Inc., we help you clarify your goals and advise you in the best way to achieve them. It may be possible to reduce your portfolio’s volatility and at the same time allow you to reach your desired destination.