Investing with Compass

Compass Financial Planning has a client-focused, research-based approach to investing. We combine our asset class research with our information about you to create a customized asset allocation for your portfolio that will help you to reach your financial goals with a level of risk that makes you comfortable.

Compass typically builds diversified portfolios using mutual funds and exchange-traded funds.

We like to hit singles rather than swing for the fences. This means that we prefer to add value through fund selection and smaller tactical asset allocation shifts rather than making large aggressive calls on the timing and direction of markets.

Compass Financial Planning’s Investment Philosophy:

  • Asset allocation is the primary driver of investment returns and volatility over time
    • Selecting the correct asset classes for investment and the correct weightings of those asset classes is key to achieving clients’ financial goals with a client-appropriate level of risk
  • Diversification is key
    • Large individual stock positions come with idiosyncratic risk which can destroy value over time
    • Carefully selected mutual funds provide diversification that minimize idiosyncratic risk
  • Disciplined re-balancing is the best way to buy low and sell high
    • Large swings in asset allocation in anticipation of market movements often do more harm than good due to mis-timing
    • Disciplined portfolio re-balancing and occasional smaller tactical asset allocation shifts consistent with clients’ goals and risk tolerance is a safer way to benefit from market movements over time
  • Researched mutual fund selection makes a difference
    • A thoughtful approach to mutual fund research and selection can create a mix of actively and passively managed funds which provide superior expense-adjusted, risk-adjusted returns over time

How Does Compass Add Value Through Their Process?

  • Thoughtful and researched approach to asset allocation
    • Compass considers historical return and risk measures as well as liquidity and correlation with other asset classes in determining which asset classes to include in a client’s target asset allocation
  • An open-minded, data-driven approach to mutual fund selection
    • We have an in-depth research process to find funds in each asset class which have historically generated superior risk-adjusted, fee-adjusted returns
    • Compass’s fund research process includes analysis of historical performance, risk, fees, institutional stability and people and process
    • Our recommended funds include both passively and actively managed funds that seek to add value through different methods
  • Regular monitoring of asset allocation and mutual funds
    • Compass tracks market valuation and fundamental factors of asset classes to determine whether tactical opportunities exist to shift asset allocations
    • Mutual funds are monitored regularly to evaluate any major changes that occur in fund management or structure that could impact expected future risk or returns

Let’s Make Your Financial Goals Happen