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Personal Index Portfolios

Personal Index Portfolios combine the best features of low-cost indexing, active tax-management, and the inclusion of your environmental, social and faith-based views.

Research has long shown that trying to beat the performance of an index using active portfolio management is ultimately a “losers game" and that taxes and other costs dramatically reduce portfolio performance over time compared to index investing. 

Instead of spending our efforts on outcomes we can’t control (beating the market), we focus on the things we can control. We document those into a written Investment Policy created specifically for you. We are not stock pickers or market timers, our role is to manage your portfolio according to a written plan, serving as your fiduciary.

In doing so, we use a 5-Step Process that leads to a low-cost, personal index portfolio consisting of individual stocks and ETF’s. This approach allows us to actively manage taxes and other costs while incorporating your social values, faith, and market viewpoints in order to improve your investing experience.

Personal Indexed Portfolios

Personal Indexed Portfolios

Step 1. Discover your Financial Personality

Our scientifically-backed financial personality assessment for investing (similar to a Myers-Briggs® Type Indicator) is designed to draw the strongest positive connection between you and your money. Before we start the investment process, we take the time to understand what drives your financial decisions along these dimensions:

  • Purpose: having a positive impact on the world through ethical and Socially Responsible Investing
  • Faith: Ensure elements of your faith are reflected in your portfolio
  • Security: Understanding your need for security and peace of mind
  • Touch: Linking your investing with a desire for meaningful relationships
  • Viewpoint: Exposure to themes you feel are changing the world

Take Personality Assessment

Step 2. Data-Driven Asset Allocation

Asset Allocation - The mix of stocks, bonds, and cash is a large driver of your portfolio’s return. This decision is too often based on emotions rather than facts. With respect to asset allocation, many advisors will assign you a one-size-fits-all risk number. We develop a data-driven allocation range, with your risk preference on one end and your risk capacity on the other, that helps you understand your unique risk-band of tolerance. Your portfolio should fall between these two risk scores.

Step 3. Personalized Portfolio Construction

Rather than investing solely in index ETFs, Index Tracking Portfolios allow us to own individual stocks that track the performance of an index, providing greater control, customization (inclusion of existing holdings, social and faith-based values screening), and enhanced tax management opportunities.  

We are able to exclude individual stocks, sectors or asset classes from your portfolio. This allows us to balance risks you may face outside of the portfolio we manage — from other investments, from your employment, even from where you live. By doing this, we construct a portfolio that is tailored to your unique life circumstances.

Step 4. Active Tax Management

Tax Management decisions are not made in isolation but instead are considered in relation to the portfolio as a whole. Tax savings are always considered against maintaining your portfolio’s recommended risk and investment mix.

We take a 3 step approach to tax management:

  1. Tax Budget: we formulate a tax budget for each client.
  2. Asset Location: we prioritize putting the right securities in the right accounts to maximize benefits.
  3. Tax Management Strategies:
  • Long-term capital gains recognition vs. short-term
  • Realizing losses through Loss Harvesting
  • Offsetting gains with losses
  • Monitoring wash-sale violations
  • Tax lot management

Step 5. Customized Risk Management

We customize risk management strategies to each client to match their individual risk tolerance. To accomplish this, we use tools such as:

  • Fixed Asset Allocation
  • Comprehensive Risk-based Rebalancing
  • Portfolio Hedging (where appropriate)

Let us build a personal index portfolio for you.

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