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1.
Why should I hire a professional money manger
directly rather than just buy a mutual
fund?
2. Is a concentrated investment portfolio more
risky?
3. I do not want to own tobacco stocks. Can I
still hire you?
4. I have a large block of stock at a very low
cost basis. Would you sell the stock immediately
and make me pay all the taxes at once?
5. I plan on retiring in 3 years. Do I have to
have a 100% stock portfolio?
6. Does it matter which portfolio manager is
assigned to me?
7. Are my transaction costs higher by using a
money manager?
8. Where are my assets actually held?
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1.
Why should I hire a professional money manger directly rather
than just buy a mutual fund?
Mutual funds are also known as
pooled investment vehicles, meaning your cash is pooled with
other investors to create one large portfolio. You typically
do not meet the decision makers or have any input in the buy/sell
decisions regarding taxes or social restrictions. At Holt-Smith Advisors
you will have a separately managed account meaning you own
a specific portfolio that is entirely in your name. You will
receive a detailed report listing exactly what you own and
will be provided with the opportunity to speak with the portfolio
managers and research team at Holt-Smith Advisors. We can work with your
accountant to provide tax lot selling. Your account can also
be set up to provide periodic cash transfers directly to your
bank account.
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2.
Is a concentrated investment portfolio more risky?
Concentrated
does not mean under diversified. We typically own around 25
stocks in our Large Cap Growth and Large Cap Value portfolios
and 30-40 stocks in our Mid Cap Growth portfolio. We are diversified
across sectors and industries by limiting sector exposure
to 30% in any one area and not owning competing companies
in an industry.
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3.
I do not want to own tobacco stocks. Can I still hire you?
Although
we use a concentrated investment style we are willing to
work with you regarding social restrictions you may have
for your portfolio. We typically do not have objectionable
stocks in our portfolio because we want to own companies
that show increasing demand and have a strong long-term
outlook. Those criteria are hard to achieve if people
view a company’s product as detrimental.
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4.
I have a large block of stock at a very low cost basis. Would
you sell the stock immediately and
make me pay all the taxes at once?
We would want to sell the stock if it is not
one we currently own in our portfolios, but we do understand
the tax implications. We would work to establish a plan
to realize the gains over a period of time and try to offset
some of the gain by taking losses where available.
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5.
I plan on retiring in 3 years. Do I have to have a 100% stock
portfolio?
When
you sign up with Holt-Smith Advisors we work with you to
understand your goals and risk tolerances. Based on your
answers an investment plan and asset allocation is discussed
with you and provided to you in writing. This allocation
can include fixed income and minimum cash requirements to
help meet your monthly or yearly obligations as well as
providing the risk level to allow you to sleep at night.
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6.
Does it matter which portfolio manager is assigned to me?
Holt-Smith
Advisors uses a team approach to manage the portfolios.
All of the portfolios own the same stocks with the exception
of some social or tax planning issues, but we assign a specific
portfolio manger to handle the day-to-day monitoring of
the account as well as provide a consistent resource for
communications. Each portfolio manager is also a member
of the equity team and the team decides the purchase and
sale of stocks across all portfolios. The same portfolio
manager attends all quarterly meetings with you to provide
consistency, but the senior portfolio managers rotate through
the different meetings allowing you the chance to meet with
more people in the firm and get a better feel for who is
managing your assets.
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7.
Are my transaction costs higher by using a money manager?
Your trading costs are usually lower by using
a money manager. We can group your account with others to
create a large block purchase or sale and take the block
directly to a market maker or institutional sales desk resulting
in better execution at a lower per share price. The purchase
or sale is then allocated proportionately directly to your
account.
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8.
Where are my assets actually held?
We
work with a variety of custodians including banks, brokerage
houses, and trust companies. You select your custodian.
Your custodian will provide you with monthly statements
as well as confirmation notices of trades we have done in
your account. None of your assets are actually in our possession
or held on our premises.
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