The rearview mirror approach rarely leads to outperforming the market. That’s why we apply a forward-looking approach to investing. Koenig Investment Advisory is always anticipating which investments will do best in the current market cycle.
Different styles of investing work at different times. It takes years of experience and knowledge to be able to identify the trends. Following the masses blindly into the “flavor of the year” scarcely ever pays off. Koenig Investment Advisory’s seasoned principals know how to discern a flash in the pan from a sustainable investment.
We specialize in managing money with mutual funds, individual stocks, and ETFs. The use of a wide array of mutual funds has proven an excellent investment vehicle for most investors, bolstered with appropriate stock and ETF positions for larger accounts. Koenig Investment Advisory has created asset allocation models that address varying client needs due to account size, risk comfort, current and future income needs, and other similar criteria. We match clients to models and look to current market cycles to determine which particular assets each model will hold, reviewing both our matches and model portfolios on a regular basis.
Active vs. Passive Management
Much has been written in the past few years about indexed ETFs and mutual funds. Their appeal lies in their ease of purchase and lower expense ratios as compared to actively managed portfolios. They match an index or sector’s returns with no time needed for market research and no advisor needed. DIY investors are encouraged to buy into these assets, with a “set it and forget it” approach. While this approach does work well for some investors, these articles typically downplay the risks.
Markets are constantly moving through up and down cycles. This volatility can wear on investors. It’s only human to abandon a losing proposition and buy into a winning one. This approach can wreak havoc on an investment account. We have watched volatility stress investors, causing them to sell low and buy high. Most importantly, we’ve seen the effects of DIY approaches cause delays in retirement, lower college savings balances, and delay home purchases.
There is a difference in accumulating assets and eventually using those assets to fund an activity. Indexed assets typically generate little income, meaning retirees need to sell and draw down principal if using these securities. In contrast, risk-adjusted, actively managed portfolios can be constructed to meet income needs while still providing moderate growth.
An advisor can help craft a portfolio for you that meets income needs and decreases volatility, allowing you to sleep more peacefully during down market cycles. An advisor can help you step back and more rationally assess a change within your portfolio. An advisor can help walk you through your options when inheriting assets, rolling over employer plan accounts, or dealing with other similar financial events. An index fund cannot do any of this.
There is no one-size fits all approach to investing. We’re here to help clients navigate the markets in a manner that fits with their personal goals and addresses their concerns. Our office is a partner and resource, using our decades of market experience to help clients avoid unnecessary hassles, mistakes, and worry.
Resources
Koenig Investment Advisory uses a variety of research material and technical analysis sources to assist in our decision making. We subscribe to several tools, including Market Smith, Argus Research Company, Morningstar, Value Line, and company specific research services. These tools allow us to deeply drill down into data in order to comprehensively evaluate investment possibilities and suitability for clients.