Wealth Management Investment Philosophy | D&Y Wealth San Diego


There’s a tremendous amount of noise in the investment world about the best ways to invest. Some financial advisors promise hot “stock tips,” returns that supposedly beat the market year after year, and secret insights to make you lots of money without a lot of risk.

That’s not D&Y.

Instead, we follow an evidence-based approach and focus on the factors we can control. Here’s what we believe:

Your goals come first. What is the purpose of your wealth? Are you saving for a new house? Supporting yourself in retirement? Or are you building a legacy to leave to your heirs? Your goals shape how we invest. One size does not fit all in terms of portfolios. Instead, we build a custom portfolio that’s tailored to you.

Market timing doesn’t work. Research shows that it’s extremely difficult to time the market successfully. To do so, market timers must accurately make two decisions:

  • When to sell their investments to get out of the market
  • When to get back into the market by buying those investments again

Have you ever noticed that active traders use the market as their benchmark for performance? They’re forever trying to beat the benchmark. But few do that consistently. And figuring out who is going to be among those few? Well, that’s akin to clairvoyance. (For more information, see the Persistence Scorecardopens PDF file , published by S&P Dow Jones Indices.) We don’t believe anybody has a crystal ball, so we don’t time the markets.

Diversification is your friend. Stories abound with news of people picking one hot stock and riding it to the top. But the reality is that there are just as many—or even more—losers in that game. How do you know what the winners will be? You don’t. That’s why we believe in diversifying your portfolio. 

Risk and returns are related. To get higher returns, you do have to take some risk. But how do you know what’s a smart risk to take? And how do you avoid taking on too much risk for your situation? We can help you feel comfortable with the appropriate risk levels for your long and short terms goals.

Asset allocation is crucial. How much do you want to hold in stocks versus bonds? How much should you have in cash? A good financial advisor will design a strategy that thoughtfully answers these questions for your specific situation.

Rebalancing should not be emotional. As humans, we are emotional beings. But gut feel is rarely a good guide for investment decisions. “Buying low” and “selling high” in practice can feel hard since you are buying while the market drops and selling while it climbs. If you manage your portfolio based on emotion instead of strategy, you can erode your returns over time. At D&Y, we serve as your objective partner, monitoring your portfolio daily and buying and selling to bring everything back in line with your plan.

Minimizing costs is key. One sure way to keep more of your hard-earned money is to minimize the various costs you incur. This means keeping an eye on:

  • Trading costs. The more you trade in and out of the market, the more you’ll pay in commissions, trading fees, and trading spreads (the difference between the price at which you can buy and the price at which you can sell).
  • Expense ratios and other costs for your funds. Not all mutual funds or index funds are the same. Fees vary. And some funds even charge marketing fees (which are called 12b-1 fees) and other costs.
  • Advisor fees. We charge a low fee relative to our industry. (On the first $2MM, our fee is 0.85%, and there’s a decreasing rate as assets increase. Our full pricing is here.) Make sure whatever advisor you choose does the same. You can read more about advisory fees, including averages for our industry, here.

And speaking of costs… 

Taxes matter. Tax law is complicated. Part of our job is to make sure that you’re paying as little taxes as possible on your investments. We use several strategies including:

  • Optimizing your account holdings. We look at the tax implications for each of your accounts, from your IRAs and 401(k)s to your taxable brokerage accounts and deliberately put more tax efficient investments in the taxable accounts. But we keep an eye on your total holdings so that we make sure you are still balanced across your whole portfolio.
  • Tax loss harvesting. We track all securities in your portfolio daily. As they fluctuate in value, we identify which ones should be sold to take advantage of capital losses. We then buy a comparable investment in order to maintain the diversification and desired balance of your portfolio.
  • Tax smart charitable giving. If you enjoy donating to charities, we can help you do so in the most tax-efficient way. Often, there are much more tax-efficient ways to be charitable than writing a check. For example, gifting highly appreciated stocks is a great option that can also help you rebalance your portfolio. Other alternatives include donor-advised funds and, for those who are 70-½ and older, qualified charitable distributions from IRAs. We help you understand what the best options are for your situation.

There’s no free lunch. If something sounds too good to be true, it probably is. Returns that supposedly beat the market tend not to hold up over time. Returns that seem high tend to be linked to much higher risk investments and may have higher fees. We believe in evaluating all returns after fees to get a true picture of performance.


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