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Since our founding in 1987, FAI has pursued a disciplined value investing philosophy. This valuation foundation has served us well through both up and down investment cycles. Recently, we also incorporated this valuation discipline into our equity asset allocation process. Since stocks have the largest impact on portfolios because of their wide range of potential returns (standard deviation of return), we believe that successful active equity asset allocation can deliver performance enhancements to our clients’ portfolios over full investment cycles.
As the leading advocate for female consumers, WomenCertified®, Inc. is pleased to announce that Lyn A. Dippel, President and CEO of FAI Wealth Management, has received the Women’s Choice Award® for Financial Advisors based on rigorous research, 17 objective criteria including a client survey to obtain feedback regarding service and practices. The Women’s Choice Award is the only recognition program for well-qualified advisors who are committed to the women’s market and serving their female clients. Achieving this award reaffirms the commitment FAI Wealth Management has to extraordinary service in addressing the financial needs of women and their families. “I love working with women. Because women often come in with slightly less confidence than men, they are eager to listen and expand their understanding. They are typically more discerning and make thoughtful decisions. It is fulfilling to watch them succeed financially and feel empowered.”
Fiduciary responsibility and best practices should be a priority for employers offering defined contribution retirement plans. Starting in 2012, the Department of Labor increased disclosure requirements for plan fees and established guidelines for ERISA (Employee Retirement Income Security Act) compliant retirement plans. After sharp market declines during the recessionary period of 2008–2009, these guidelines were established to protect plan participants. Market volatility and declining account values increased litigation against plan sponsors and highlighted the need to monitor and disclose plan fees. New guidelines also focused on improving the process of educating participants on the importance of investment diversification.
Disappointing clinical trials and steep prices are leading some advisers to split their bets on biotech stocks between funds focused on health care and technology. "We like to invest in companies with innovative products, but at reasonable prices. Biotech has become too rich for our tastes," says Curt Gross, research director at FAI Wealth Management in Columbia, Md., with $325 million in assets.
Inquiring Minds Want to Know... Q. I'm curious to know FAI’s thinking on the prospect of market gyrations around the current Government “Shutdown” and any potential Government “Default” on its debt payments. Are these risks that require any defensive portfolio adjustments?
Another way to view the market is by evaluating a biotech company's value relative to how much it's spending on research and development -- often considered the industry's real growth engine. Those metrics show a market that's a bit split, says Curt Gross, research director at FAI Wealth Management in Columbia, Md., with $300 million under management. He agrees large-cap biotech prices appear stretched. But mid- and small-cap stocks are trading at much more appealing valuations, Mr. Gross says.
2013 has provided a real test to the merits of owning a diversified portfolio. It has been hard to rationalize the dislocation we’ve seen across the global markets and we hope that the insights listed below will help put markets in better perspective for our clients.
In the first five months of this year, the S&P 500 stock price index has soared 16.4%! To put that gain in some perspective, it’s five times the 3.2% average five-month price appreciation for stocks over the past 60 years! What’s going on? Has the economic outlook brightened that much? Should we own more stocks? Inquiring minds want to know. The question is especially poignant for FAI clients because we have been keeping our percentage allocations to equities lower than they might have been if we were more optimistic about future stock prices. In this Strategy Update we re-examine the reasons for this cautious investment posture.