We’ll start by asking you a question: How have your investments performed over the last several years? It is vital that you know the performance of your investments. If you don’t know or haven’t received this information from your current investment professional, contact them and ask they provide you this information. Ask them how your portfolio has performed in comparison with a number of benchmarks, not just the S&P 500.
How does Koenig Investment Advisory measure the performance of my account?
All transactional information is entered into Morningstar Office, a performance tracking system. The program tracks deposits, withdrawals, interest, and dividend income and produces monthly, quarterly, and since-inception performance data. Reports are retrieved via a password-protected website accessible only by Koenig Investment Advisory.
What is a “managed account”?
A managed account represents a portfolio of securities driven by the objectives of the personal investor. Managed account clients give Koenig Investment Advisory authority to buy and sell investments without requiring authorization for each individual portfolio change. Clients receive monthly reports showing account holdings and individual asset valuations. All client buy-sell activity is available electronically the same day, and within one week if mailed. We provide a full summary recap of all activity monthly.
What is the S&P 500?
The Standard and Poor’s 500 (S&P 500) is an index comprising 500 different stocks. This index represents all major sectors of the U.S. economy and is periodically rebalanced by Standard & Poor’s. The S&P 500 is the best quick benchmark for broad the U.S. stock market. However, the S&P 500 does not contain information regarding the bond markets, small and mid-cap companies, and international markets. It is a great tool for a quick understanding broad market activity, but is limited to this use.
How do I know you are not taking outsized risk to achieve the performance in my portfolio?
The broad stock market (S&P 500) is assigned a beta rating of 1. Beta is a commonly used benchmark of volatility. Our subscription service to mutual fund research data provides three- and five-year beta numbers on mutual funds held in Koenig Investment Advisory portfolios. The majority of no-load funds held in client accounts have a beta rating at or below the broad market. Portfolios may contain one or two funds with a beta slightly above the broad market and other funds with a beta well below the broad market.
What types of investments do you use in client accounts?
Portfolios above $100,000 in value generally use a mix of individual stocks, no-load mutual funds, exchange traded funds (ETFs), master limited partnerships (MLPs), and individual bonds as warranted. Portfolios below $100,000 are typically invested in a mix of mutual funds and ETFs.
Do you allow accounts of lesser values—such as savings accounts for grandchildren or newly created IRAs with just a year or two of contributions?
From time to time, clients do note a need to open an account that is below our typical threshold. Newly created accounts that are expected to receive consistent annual contributions can often be opened with less than our usual minimum requirement. However, minimum initial investments and the needs for appropriate diversification are concerns for smaller accounts and may mean that we are not the best provider of services for these accounts. We evaluate the needs of each household on a case-by-case basis in such situations to determine how we can best fulfill our fiduciary obligations to each household when it comes to the opening of small accounts.
Does Koenig Investment Advisory perform any other services?
We provide our clients with a complete review of your financial health by performing financial planning, retirement and distribution planning, and estate trust planning. However, we do recommend that you utilize other professionals such as CPAs, tax and estate attorneys, and real estate brokers as a complement to our services.
Do you receive any fees for purchasing specific mutual funds or stocks in my account?
Any mutual funds purchased are no-load funds. We receive no fees for purchasing mutual funds or stocks. Koenig Investment Advisory earnings are limited to the management fee charged as regulated by the SEC and calculated on the percentage of total assets managed. We do not earn fees from any other source. This fee-based approach aligns our interests with your interests.