The appropriate investment of your assets is a critical part of achieving your objectives. At Garnet Group we practice a disciplined approach to true diversification and to sensitively manage risk on your behalf. We are discretionary investment managers — which means that we have limited power of attorney over client accounts and execute trades on their behalf without preliminary approvals. All decisions are guided by an investment policy statement, created and agreed upon by the client and his or her Garnet Group advisors as part of their comprehensive planning.
Our experience shows — and historical analysis confirms — that a broadly diversified portfolio reduces risk and provides consistent returns. There are several constants that hold true for investors regardless of their resources:
Markets are uncertain.
It is extremely difficult to predict when any one market sector will outperform, but it is important to be there when it does. Numerous studies have attempted to capture the degree to which investors misjudge market movement, chasing recent winners, leading them to buy high and sell low. A definitive study of investments by Dalbar, Inc shows that investors have fared 4% below market returns as measured by the S&P 500 over the last 20 years.* Even if you are frequently correct, a few mistakes in timing could wipe out your advantage. This is why it is important to have an investment strategy based on your goals and to adhere to it during market fluctuations.
Make the most of what you can control.
Since so many of the elements of investing (e.g. corporate management, mutual fund management, domestic economic policy, and international issues) are not within the control of the investor it is imperative to have an effective approach to managing that which is in your control. For us, this means using investments that offer strict adherence to investment style, low cost, and transparency of holdings.
Maintaining discipline in your asset allocation and diversification improves your chances of long-term success.
Your investment strategy only works if it reflects your goals.
Our investment planning and implementation comes only after a detailed review of your entire financial situation. We take into account income tax considerations, investment income needs and your ability to weather volatility in your portfolio. Throughout the process we explore the nature of risk in investing, making recommendations aimed at balancing your current lifestyle with your future needs.
By setting a rational investment plan and sticking to it you gain confidence that you are investing in a way that puts you on track towards achieving your goals and frees you from worrying about short-term returns.
*2013 Dalbar “Quantitative Analysis of Investor Behavior”.