Embracing the Power of an Institutional Investment Approach

By Gene Balas, CFA®
Investment Strategist

Emotions are what make us human, but basing one’s entire financial decisions on those emotions can be detrimental to our wealth. Simply following what we feel like what might be the best approach may instead ultimately impede our plans for the future, whether saving for retirement, bequeathing funds to charitable organizations, or leaving a legacy to our heirs. Rather than emotion, however, financial decisions must depend on logic, facts, and evidence.

A disciplined approach, not surprisingly, can lead to better outcomes than shifting one’s views with every new idea. Oftentimes, that discipline comes from other people’s different perspectives and insights. Pensions, endowments, foundations, and other such investors have dedicated investment committees to collaborate with the investment consultants they hire. And those investment consultants, in turn, rely on a team of asset allocation strategists, due diligence analysts, and risk managers. It truly does take a team-based approach to build – and follow – a disciplined, rigorous investment policy and plan.

But outside of large institutions, how does an investor create such a strategy? Working with a trusted financial advisor is often one way to adhere to such a methodical approach to investing – just as an institution develops its investment policy statement with its outside consultants to dictate the objectives, parameters, and limits in how its funds must be invested.

At Signature Estate and Investment Advisors (SEIA), your financial advisor is your counterbalance to the basic human emotions we all feel, including fear – including the fear of missing out – and our emotions are based in part on the social influences of doing what we think our friends and acquaintances might be doing in their own portfolios. (Hint: people brag about their portfolio’s winners, and rarely discuss their laggards. Take views from friends and acquaintances with more than a few grains of salt.)

And your SEIA financial advisor is more than just the one person with whom you discuss your goals, dreams, and fears about investing. He or she is tapped into a broader organization and ecosystem with analysts, portfolio managers, due diligence specialists, and risk professionals at their disposal. Their sphere of knowledge includes resources from not just one firm, but also from the many organizations a good financial advisor incorporates into your financial plan.

And the important thing is to follow that plan, asking questions as they arise, and seeking guidance as you desire. This is a collaborative endeavor, after all. But it is also a disciplined endeavor. One should never make investment decisions on a whim, nor based on a single news snippet or what a friend of a friend mentioned.

At SEIA, we do have at our disposal a vast array of data providers, research analysts, and portfolio managers that provide the content our own substantial research team digests and incorporates into the recommendations our advisors make for clients. Your SEIA advisor will guide you on your journey – and importantly, keep you from straying off the path on your way to reach your goals.

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The information contained herein is for informational purposes only and should not be considered investment advice or a recommendation to buy, hold, or sell any types of securities. Financial markets are volatile and all types of investment vehicles, including “low-risk” strategies, involve investment risk, including the potential loss of principal. Past performance does not guarantee future results.  For details on the professional designations displayed herein, including descriptions, minimum requirements, and ongoing education requirements, please visit seia.com/disclosures. Signature Estate & Investment Advisors, LLC (SEIA) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through SEIA, 2121 Avenue of the Stars, Suite 1600, Los Angeles, CA 90067, (310) 712-2323. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products, or services referenced here are independent of Osaic Wealth, Inc.

 

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