Frequently Asked Questions

Questions you already may have for us.

Why should I pay to have someone manage my investments?

What would be your process for determining what will go into the portfolio and why? We think advisor-driven investment solutions can serve as more efficient alternatives to self-directed portfolios that, if statistics regarding the success of individual investors is any guide, may offer incremental benefit with regard to your meeting your long-term financial goals.

The investment industry has evolved to provide an immense range of tools for most any investor to fill portfolios with exciting investment products. But, the process of determining what belongs in a portfolio retains a complexity that may not be readily apparent to most, not solely due to the breadth of investment options now available. Ever present remains the pressure to “succeed,” but success is measured by the individual and building the path to success can be more critical to that success that simply identifying a desired end result.

Why should I have SRCM manage my investments?

Instead of focusing on proving we’re the smartest folks in the room, we’d rather focus on you, the client. Tapping into the wealth of knowledge that investment history and the broader investment industry can provide, we seek only to bring clarity and comfort to the investment process in the pursuit of more favorable outcomes for those clients who entrust us with their savings.

Of all factors that can impede progress toward meeting long-term financial goals, we believe that ignorance of the emotions that surrounds the investment process can lead to poor investment outcomes for many. In that view, the primary benefit to managed investments may be the clarity that an investment advisor can bring to the investment process. Even more, perhaps the most powerful force in investing can be the comfort and confidence of knowing someone is looking after your hard-earned monies with your best interests in mind. Our focus on the client experience, which emphasizes both the path and the outcome, we think sets us apart from the work of other investment managers and offers substantial potential benefit relative to investment efforts a client may make on his or her own.

What’s the gist of your approach?

We manage a suite of model portfolios for advisors to select for their clients, based on individual tolerances for risk and timelines for meeting investment goals. Each invested across multiple asset classes, the long-term-oriented models are designed to serve as whole- or core-portfolio solutions.

Who picks stocks for my portfolio?

Pretty much no one is good at stock picking. We’re simply honest about that fact. We instead seek to connect clients with the potential benefit of equity investing without all that senseless energy that can come from likely doomed-to-fail efforts to pick winners from the vast crowd.

No one “picks stocks” for your portfolio. Our own experience and the historical record of the broader investment industry suggests that a focus on individual stock picks tends to lead to less-than-optimal outcomes and underperformance relative to client expectations. Instead, we focus on the broader picture—choosing the forest over individual trees—in an attempt to pave a smoother path toward meeting client investment goals. In that metaphor, the forest is a very broadly diversified portfolio of individual domestic and international stocks that looks much like the broader market in terms of numbers of individual stocks owned. And this broad diversification is achieved in our view most efficiently through ownership of equity-oriented mutual funds and exchange traded funds (ETFs).

How do you decide what to put in my portfolios?

Our approach to investment management is humble in concept and efficient in practice, incorporating only those investments market history and client engagement suggest need to be in portfolios and leaving out those that are unlikely to bolster efforts to meet client-specific investment goals.

Though achieving some manner of return generally remains the focus of investing, all investing carries risk. And the greater the return we seek, the greater the risk we may need to accept. We thus believe clients are best served with an approach that matches their individual tolerance for that risk with the longer-term financial goals. Our investment suggestions thus first focus on matching tolerance for risk with an appropriate portfolio allocation. After that, our approach focuses on characteristics that over the course of investment history have shown to lead to more favorable outcomes, measured in terms of client satisfaction and in terms of absolute and relative returns.

How do you determine an individual’s tolerance for risk?

All investing carries risk. How will you determine how risky your investments are and how willing you are to endure market tumult before it occurs?

We are quick to admit that the process of determining risk tolerance remains more art than science. Our efforts focus on practical methods to educate clients as to what history can tell about investing risk. We believe that focus, in turn, allows us to foster a conversation with clients regarding market risk in order to support client comfort both in advance of and during market tumult. These conversations, we believe, help clients remain invested during such difficult periods, a critical component, in our view, of achieving long-term financial goals.

How does my portfolio reflect my risk tolerance?

In our portfolios, we incorporate stocks in pursuit of potential long-term gains, while adding generally less-risky bonds to buffer stock market volatility and provide incremental income in the meantime. The split between the two reflects individual risk tolerance.

While all investing carries risk, not all investments are equally risky. We seek long-term gains with stocks, but know those expectations come with risk. Bonds are risky, too, but generally far less so than stocks. We thus seek to temper equity market volatility with bonds, thereby bringing overall expectations of an individual’s portfolio volatility in line with their tolerance for market risk.

How will you change my portfolio to address XYZ?

Markets already reflect what everyone thinks is going to happen. The smarter person seeks to benefit from the superior wisdom of the crowd.

Our portfolios are designed with a long-term horizon in mind, focusing foremost on factors that matter most in regard to meeting long-term client goals. For the relatively meager incremental gain that might be gained even under optimistic scenarios, we understand that market timing is far more likely to lead to an advisor’s failure to support long-term client goals.

Have further questions?

We'd be happy to help.
120 Newport Center Drive
Suite 100
Newport Beach, CA 92660
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