Roadmap now in hand, it’s go time!
Our experience says that executing the plan can be the hardest part of the journey. But at Nicollet Investment Management that need not be the case.
We pride ourselves on the customized solutions we deliver to each and every one of our clients. However, it’s our ability to execute the investment of your solution that really sets us apart.
Many firms offering financial advice lack the investment expertise to implement your plan, so they use outside (third-party) investment managers. We don’t believe this is in your best interest for a couple of reasons.
First, it raises your cost; more important, a third-party investment manager cannot manage your money in the context of your roadmap. Their business is to pool all assets they received and deliver a one-size-fits-all product. You get what everyone else is getting.
To address the cost issue, many firms have begun advocating passive investment strategies. This approach will lower the cost of your investment management, but that’s not the whole picture. You need to know the total cost of the service being provided.
We compete with all the alternatives available to you today, but our use of individual stocks and bonds to build your portfolio gives us the ability to customize your investments to your roadmap, putting us in another league altogether.
Managing your investments starts with the work we do to understand your financial picture.
That work results in annual projections of the amount you can save while you work, and then what you will need when you retire.
We bring this cash flow information down to each individual account you have, assessing whether to use IRA withdrawals, after-tax savings, or some combination to fund your cash needs.
The roadmap tells us in great detail how money is needed from each of your accounts. That information fuels the specific investment allocations we make for you.
Few firms are willing, or able, to execute plans at this level of detail.
In allocating your savings, we start by identifying the amount you should keep in cash. This is sometimes a decision based on feeling secure or maintaining some sort of flexibility. We believe everyone should keep some amount of cash as a reserve for “off-budget” spending decisions and/or just peace of mind.
With cash allocation set, we look next at what you should allocate to fixed income securities (bonds) that provide specific cash flows to you. Fixed income securities pay regular interest and mature at some point, returning the par value of your investment.
Fixed income securities are not subject to the same price volatility you see with common stocks. They are ideal for funding expected withdrawals (per your roadmap) providing very predictable cash flows.
We use fixed income securities to fund your short-to intermediate-term cash withdrawals. We strongly believe that the more years of expected account withdrawals you can fund with fixed income, the better.
When looking at fixed income securities for you, we also have to decide whether you should own tax-exempt municipal bonds or corporate bonds. Again, the roadmap will have charted which types of bonds you should hold. But to fund your retirement over the long-term, we most often find that you will need your savings to grow.
Once prudent allocations are made to cash and fixed income, your remaining available money can be invested in stocks for long-term appreciation. The more years of fixed income you have funding your expenses, the longer-term perspective we can take on your stock investments.
That’s exactly how equity investing should be done anyway!
As for the specifics of investing in the stock market, Nicollet Investment Management offers two core stock strategies.
Large Cap Growth
With this strategy, we buy individual stocks of the largest, most stable companies available in the market. We invest in a diverse selection of top-tier companies from around the world. Our goal is simply long-term appreciation in the businesses we own. There is no quarter-to-quarter urgency or knee-jerk reactions. We are confident that our experience in stock portfolio management will achieve the goals set out for this portion of your portfolio.
Mid/Small Cap Growth
With this strategy we take more of an aggressive approach, thus more risk. Specifically, we target mid/small-cap stocks that are growing at a faster pace while having a strong market position with respect to the products or services being sold. These tend to be the emerging winners that historically offer superior returns for investors who can take a long-term perspective.
The research and investment management team at Nicollet Investment Management uses individual stocks and bonds when building customized portfolios for our clients. Decisions are based on internal research, which we believe is essential to truly understand each investment we make. We also have decades of market experience guiding us through all sorts of market conditions. This expertise bears the most fruit in the perspective we bring to each of our client’s portfolios.
Using individual stocks and bonds also gives us the flexibility to implement tax-sensitive strategies for realizing capital gains and losses without hurting the overall integrity of the portfolio. As part of our process, we review all of our clients’ non-retirement portfolios on an annual basis to look for tax-efficient year-end strategies.
Each component of our investment management process is integrated with your personalized financial roadmap. Few firms combine the systems, people, and expertise to deliver cohesive investment management and planning.
CURIOUS TO LEARN MORE?
We’re curious to learn more about you, too.
We’d love to talk to you about your financial goals and dreams. We’ll listen carefully in order to understand the things that concern you. If you contact us, we will answer all your questions about what we do without any obligation on your part. It all starts with a phone call or email.