Clarfeld Investment Philosophy

At Clarfeld, we act as a private investment advisor who adheres to the tenets of strategic and tactical asset allocation and strive to deliver risk-adjusted market returns while tightly managing portfolio volatility.  Our investment philosophy centers around five primary principles:

Strategic Asset Allocation
We are, and will remain, committed to asset allocation and diversification, both among and within asset classes.  Diversification entails thoughtfully combining multiple uncorrelated return and volatility streams to create a portfolio that targets a given rate of return with lower risk than could be achieved through any of the component asset classes.  As long-term investors, through global wealth management, we employ broadly held asset classes such as equities, fixed income, real estate, commodities and cash, which we further diversify by geography, investment style, and market capitalization.

Tactical Portfolio Shifts
In the world of investments, change — foreseeable and unforeseeable — is the only constant. Tactical portfolio shifts, always fully communicated, are considered when market valuations create compelling opportunities that can be harvested to generate excess returns while managing risk.

Risk Management
Ultimately, it is our job to determine whether or not investors are being adequately compensated for the risks that lurk within the markets.  At Clarfeld, preservation of our clients’ capital is of paramount importance.  For this reason, we believe that limiting the downside in markets that do not adequately compensate investors for the risks they must assume, is more important than speculating on potential short-term gains in the face of negative long-term fundamentals.  We do not have the ability to impact market returns; we can control our clients’ exposure to risk.

Open-Architecture Manager Selection
Our objective, open-architecture, core and satellite manager selection approach provides our clients with a mix of inexpensive index exposure to a variety of individual asset classes as well as best-of-breed active management capabilities.  Our stable of managers have been thoroughly researched and vetted for portfolio inclusion by our highly experienced investment team.  We believe that manager diversification and a well-defined blend of active and passive management are key differentiators of our process.

Taxes and Costs
Portfolio turnover, management expenses, transaction costs and taxes can be highly detrimental to overall client wealth.  We attempt to manage these drains on return by properly locating assets in tax-advantaged accounts, utilizing institutionally-priced mutual funds, and investing in passively managed funds and exchange-traded funds where we do not believe there is a superior actively-managed investment alternative.