WHY TISCH

Process & Performance

There is a world of investment options competing for your attention. With capital moving across borders at the speed of light, indecision can be costly. Where will your money grow the fastest and within your comfort level for risk? What is the best way to organize your wealth? If you do not have the time, knowledge, or inclination to follow the investment markets and manage your wealth as closely as you should, we can be of help to you.

The decision to select an investment advisor is important and rests on both professional and personal factors, such as:

Experience
Repeatable methodology
Performance history
Analytical resources
Customized service
Unbiased perspective
Accessibility

Our business is organized to meet the needs of individuals, businesses, non-profits, organized labor and university employees. Our experienced financial advisors will talk with you about your objectives, develop a financial and/or investment plan, and, if necessary, coordinate relevant issues with your accountant or attorney. Our investment managers will build your portfolio using proven financial techniques, report to you quarterly, and we will be available whenever you would like to talk about your investments.

OUR PROCESS

Our proprietary investment management process is time tested and is proven to produce excellent returns. We select investments based on their expected return and covariant properties when combined with other investments. Our holdings are weighted to produce a portfolio where the risk-return trade off is mathematically optimized to meet your needs. Our decision process is organized around our team, and we regularly consult with other advisors and managers across the country to share insights into portfolio management, security selection, and learn of alternative investment strategies.

A TEAM APPROACH

Excellence in wealth management requires a broad interdisciplinary perspective combining tax, investment management, insurance, and financial planning. We are a unique team. Each of us has earned graduate degrees in financial services or investment management and/or one or more of the following designations: Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), Chartered Life Underwriter (CLU), or Chartered Financial Consultant (ChFC).

MEETING YOUR EXPECTATIONS

Our clients can expect to have their assets invested according to their personal Investment Policy Statement and proportioned in a way that will reduce risk, focus on the fastest growing sectors of the economy and be repositioned as economic conditions warrant. We constantly evaluate our stock, bond, and mutual fund selections to be certain that costs are justified by returns, and that returns are justified by the risks taken.

UNBIASED APPROACH

As a fee-only advisor, our sole source of income is the fee we charge for our services. We have no biases based on outside pressures to sell something, promote an investment, or earn commissions or bonuses. We work only for you!

OUR STRATEGY

We study the global economic forces that affect investment performance. Money is allocated among those asset classes that conform to your Investment Policy Statement, meet your standard for risk and volatility, and are those that we believe will produce above average returns. In addition, we develop your portfolio to produce the tax and income characteristics you desire. Our priorities are:

Capital preservation
Growth consistent with client risk tolerance
Tax efficiency

The two most important decisions made by an investment advisor are: selecting the most productive classes or sectors in which to invest, and determining the amount of money to place in each one. Ninety-three percent (93%) of the difference in the performance of investment managers was attributable to those two decisions. Only 7% was attributable to the choice of individual securities and market timing.* Our performance record demonstrates our skill in making these decisions.

We invest in the best performing sectors of the economy and alter our allocation to reflect changing market conditions within the parameters established by you in the Investment Policy Statement. Whenever the markets are open, we monitor the changes that can affect our clients` assets. We carefully analyze our mutual fund, stock, and bond holdings, and the equities owned by the mutual funds. We meet with analysts and fund managers to understand their strategy and view of the markets. We are not timid in taking advantage of opportunities, and we also have measures in place to limit losses when appropriate. We liquidate a position when we believe an industry or sector has peaked. Even when the general market is down, there are sectors that are performing well and we often increase our weightings in those sectors. Our management approach is top-down, sector rotational, quantitative, asset allocation. This approach requires a full-time commitment to analyzing and studying the markets.

RISK MANAGEMENT

Our portfolios are configured using nine critical risk reduction techniques:

Select different asset classes and industry sectors to enhance return and reduce market volatility.
Determine the optimal risk/return trade off among classes using a complex algorithm refined from Modern Portfolio Theory (Nobel Prize in 1990).
Employ mutual funds where portfolio size prevents proper diversification using individual securities or where specialized management is desired.
Frequent use of multiple investments per class to reduce risk.
Review above process with consideration of the growth, income, and tax components that meet the needs of each client.
Utilize laddered bond holdings to guarantee income and reduce dependence on volatile assets.
Establish stop loss limits, whereby a hedging strategy is utilized to neutralize the portfolio when conditions warrant.
At the client's option, utilize an options collar strategy to insure a range of portfolio performance.
Screen all portfolio securities for acts of corporate malfeasance and seek reimbursement where appropriate.

Each portfolio typically invests in multiple asset classes. These classes are chosen based on your needs, risk tolerance, and expected performance.

TYPES OF INVESTMENTS

We invest in stocks, bonds, and mutual funds. We do not invest in derivatives, commodities, or employ margin, unless specifically authorized by the client. The minimum investment needed to adequately diversify a stock and bond portfolio on a cost-effective basis is about $150,000. Accounts smaller than $150,000 are normally invested in mutual funds, while larger accounts frequently utilize the full range of options.

OUR TOOLS

Investment management is highly dependent upon computer and Internet software and the people who operate them. We continuously invest to upgrade our system and train our personnel. During the last two years we have invested in a completely new network and computer system, new portfolio management software, upgraded our website, and purchased state-of-the-art analytical software. Yet we answer our phones in person, and we will make ourselves available to talk with you anytime you call because we are committed to you.

OUTSIDE PROFESSIONAL REVIEW

Very few investment management firms can meet the high standards required to obtain errors and omissions insurance. After rigorous audit and review of our history, practices, and procedures, we have been underwritten by the Hartford Insurance Company for errors and omissions insurance and we carry it for your protection.

CUSTODY OF ASSETS

We do not have custody of your funds. We will assist you in opening an account with an independent custodian such as the Charles Schwab & Co., Inc., Fidelity Investments, or a trust department. You retain ownership and control. However, you authorize us to make investment decisions for your account. The account is in your name. You will receive a monthly statement from the custodian listing the assets held in your account and the transactions during the month. You will also receive a quarterly report from us which will calculate the rate of return earned during the quarter.

SCOPE OF SERVICES

Investment management or consulting services are available independent of financial planning. Our fees are based on assets under management, a schedule of which will be provided to you upon request.

COMMUNICATION

Quarterly you will receive:

Statement of Current Holdings - all assets held in different accounts are consolidated in one report so that you can easily oversee your wealth
Performance Report - we will calculate the rate of return on each portfolio and on your consolidated portfolio
Quarterly Newsletter and access to etisch.com - we will provide you with our analysis of current market conditions. We would like to review your account with you annually.

FEES FOR SERVICES

Fees are based on an hourly rate and are estimated in advance of our engagement. We will be happy to provide you with a sample investment management contract and an estimate of our fees upon request.

*Determinants of Portfolio Performance, Financial Analysts Journal, (July/August 1986):39-44; Determinants of Portfolio Performance II: An Update, Financial Analysts Journal (May/June 1991):40-48.