Investment Management

Third Millennium Advisors provides two key services in the investment management arena: 

  1. We build effective investment portfolios by sorting through the plethora of investment alternatives. 
  2. We tailor these general portfolios to each client to address his or her specific needs and goals. 

Background: The vast array of choices

Investment choices have come a long way from simply stocks, bonds, and bills.  The financial markets have added mutual funds, closed end funds, unit investment trusts, and exchange traded funds (ETFs) made up of various combinations of stocks, bonds, and bills.  You can invest in international stocks and bonds as well as domestic stocks and bonds.  You can choose from individual stocks and bonds, actively managed funds, and passively managed or index funds.  Similarly, you can buy real estate directly, you can buy private and publicly traded Real Estate Investment Trusts (REITs), and you can buy funds based on an index of REITs.  You can make these investments directly or inside variable annuities and variable life insurance.  Then there are derivatives, investments that derive their value from other goods or products.  Although derivatives are frequently considered a new trend for investing, agricultural commodity futures have been around for a long time.  Now you can also choose from futures in energy products, industrial metals, precious metals, currencies, stock market indices, interest rates, and stock market statistics.  Derivatives also include options on stocks, bonds, and futures.  Other recent additions include funds that have twice or three times the return (positive and negative) and volatility of an underlying investment, such as a market index.  There are also funds that have the inverse return of market indexes, going up when the index goes down and going down when the index goes up.  The range of investment alternatives is truly mind boggling.

Portfolio Development: Defining an effective mix

At Third Millennium Advisors, we sort through this array of investment alternatives to develop effective investment portfolios for our clients.  Staying up to date on the additions and changes to today’s investment alternatives is an ongoing and continuous process.  We may analyze the investment alternatives directly, or we may review analyses that others have done.  Based on these analyses, we will filter out some the alternatives because they are too complex, too volatile, and/or too risky.  We particularly avoid investments that have large down side risks without sufficient upside opportunities.  (Yes, they are out there!)  After this first level screening, we apply a number of different analytical tools.  We use fundamental analyses to measure intrinsic value.  We use technical analyses to monitor trading activity and investor sentiment.  We use quantitative analyses to develop detailed measures.  And, we use qualitative analyses to identify situations where a company, industry, or market may see future fundamental changes.  Some of these cases indicate that our other analytical techniques will need to be updated to evaluate the impact of these changes properly.  We specifically look for effective investment alternatives that have low operating and transaction costs, more than enough return to justify their given level of risk or a lower volatility to go with their lower return, and a stable investment style.

Meeting Clients Needs and Goals: Customizing the portfolio

When customizing each portfolio, we always focus on the individual needs of the client.  Through personal discussions and your existing financial plan (if you currently use our financial planning services), we help you develop your own personal goals and objectives.  We use your current situation, short-term and long-term goals, time horizons, risk tolerance, liquidity needs, and reasonable restrictions on investments in specific securities, types of securities, and/or industries to develop your personal investment policy statement.  Your investment policy statement will govern how we establish, manage, and monitor your investment portfolio with a key focus on meeting your goals.

We use a long-term approach to investment management with a focus on quality investments, investment diversification, and asset allocation to keep your portfolio targeted to your goals.  We believe this direction provides a reasonably stable investment management process, but the investment environment can be dynamic.  In most cases, we find that our quarterly review process provides a more than adequate opportunity to review and make any needed portfolio adjustments.  However, we do monitor your investment portfolio on a continual basis, and we will keep you informed if short-term adjustments are required.

As an independent Registered Investment Advisor, we are not limited to specific investment products.  We have access to a full array of investment products, from very conservative to very aggressive.  In all cases, the investment approach and individual investments selected for your portfolio will be governed by your personal investment policy statement.