For most individual investors, selecting stocks and bonds for inclusion in portfolios is not an effective approach for the following reasons:
- A portfolio needs to hold a minimum number of securities to achieve an optimum level of diversification. This is hard to achieve when individual stocks and bonds are used, considering the transaction costs involved in trading and holding securities, unless the portfolio size is substantial (generally in excess of $1 Million).
- Maintaining portfolios over time would also involve rebalancing the portfolio to the target asset-mix, investing amounts added through additional savings, reinvesting income generated in the account, and raising cash to cover client withdrawals. Such transactions would not be cost-efficient, unless the portfolio size is substantial.
We believe investing using low-cost mutual funds and/or exchange traded funds is the most effective method for most investors to maximize return while minimizing risk and costs. We specialize in building portfolios using fund products that best suit your needs, while letting the fund manager select individual stocks/bonds in line with the fund’s objectives.