By Scott Moser

In today’s regulatory environment, it can be a challenge to share the progress we have made in a public forum.  Nonetheless, I do think it’s important to let our constituents know what we are up to.  So, I have prepared a few highlights to summarize our accomplishments.
  
In just a couple of months, we’ll be wrapping up our 19th year as investment advisers. We recently exceeded $100 million under discretionary management. We have experienced steady and manageable growth since the start of operations and plan to continue that trend for the foreseeable future. Demand for fiduciary level advisers appears to be accelerating as investors have become more sensitive to potential conflicts of interest.  This is often prevalent with investment product sales from agents & stock brokers masquerading as financial advisers; we are clearly the beneficiaries of this trend.

We have held true to our core values from day one:

  • Provide a Fiduciary level of service, placing the client's interest, first from both a regulatory and contractual standpoint.  
  • Focus on factors we can control (fees, taxes, turnover, discipline process) and avoid those we cannot (projecting next month’s returns for stocks, bonds, interest rates…).
  • Develop a plan for each individual client suitable to reach their targets and goals.
We were early adopters of the low-cost index strategies that are now catching fire. Indexing has now become so common place that the benefits of index strategies may be eroding.  If everyone is buying an index fund, the strategy will no longer enjoy a return premium over the average investor as the index return becomes the average investor's return.
  
How can investors keep costs low and earn the premium from year's past, when only a small portion of investors were on the indexing bandwagon? Our answer is to compliment indexing by gaining direct exposure to a representative sample of individual stocks within an index, while avoiding a select few that we believe are less appealing. Holding individual stocks is often less expensive than holding an index mutual fund, and provides us with more control over tax implications while allowing for a surgically constructed portfolio.
  
As an example, we have reproduced the latest 12 months performance for the 30 stocks in the Dow Jones Industrial Index below. We have also listed the % of each stock holdings within our composite at the beginning and end of the 12-month period.  Minimizing exposure to the poor performers and emphasizing the strong performers allows us to improve upon the investment results, tax implications, and costs that could be obtained by simply holding the entire index.

The chart demonstrates that we had large relative positions in a number of better performing Dow stocks, and only modest exposure to the losers. For the year, the mission was accomplished.

 

Disclosures:   The Dow Jones Industrial Average is not intended to be representative of any client portfolio.  Since each account is individually managed, our composite may not be representative of any or all of the positions in your account.  Benchmarks indices are not available for direct investment and do not include the costs of buying or selling securities or investment management fees.  Indices are unmanaged, hypothetical portfolios of securities that are often used as a benchmark in evaluating the relative performance of a particular investment.  An index should only be compared with a mandate that has a similar investment objective.  The opinions expressed are those of Moser Wealth Advisors, LLC as of the reporting date noted above and are subject to change.  We provide no assurance or guarantee you will earn a similar or any specific rate of return. Stocks may decline  in value and you can lose part or all of your investment.  This material does not constitute investment advice and is not intended as an endorsement of any specific investment.  Information and opinions are derived from proprietary and non-proprietary sources.  Please note that investing in the stock market involves risk and no strategy can mitigate the risk completely.  This chart above is intended only to demonstrate our strategy and is not intended to provide our historical return results and should not be used for that purpose.  We would be happy to provide specific performance results upon request.