Our Investment Philosophy

Before we begin developing your investment strategy, we evaluate your current financial situation. We assess your investment goals, available resources, desired rate of return, and risk tolerance. This research allows us to customize a plan to fit your specific needs.
We develop a unique Investment Policy Statement – a blueprint that addresses your specific risk versus return concerns. Once that blueprint is in place, we provide personalized investment advice.

  • Asset allocation is the process of allocating investment funds into different asset classes in a way that enables you to maximize your expected return for a specific level of risk. We have found that it is responsible for a majority of the variations in portfolio performance – so choosing the right asset allocation for you is our top priority.
  • We carefully monitor your portfolio and make periodic adjustments to rebalance your portfolio, ensuring that our strategies stay on track with your needs.
  • We provide you with the ability to access your accounts online and provide reports summarizing the activity to your account.

Custody of our clients funds and securities are held at Fidelity Investments.

CS Advisors is committed to helping you preserve your capital and provide real growth in your portfolio after taxes and inflation. We offer you a long-term relationship to help you achieve lifelong financial goals.
 
Planning Process
1. Aggregate and Process Information - We assess your current financial situation, risk tolerance, return objectives and lifestyle objectives.
2. Set goals - We identify your long term financial and lifestyle goals.
3. Develop an Investment Policy Statement. This unique investment policy statement is used as a blueprint to achieve your stated goals.
4. Implement the Investment policy statement. Once the plan is developed we implement the plan using a variety of investment products to achieve your risk and return objectives.
5. Continually monitor your investments and re evaluate your goals. Your portfolio investments are monitored quarterly. We re-balance your portfolio according to your investment policy statement and reevaluate your goals quarterly
 
Benefits of Asset Allocation

A blended portfolio, one combining a mix of equity, fixed income securities and alternative investments, can diminish the risks associated with investing in only one asset class. Moreover, such a portfolio has the potential to provide optimum results at the level of risk where you are most comfortable.

Consequently, when developing an appropriate and effective asset allocation strategy, defining your level of acceptable risk is important. That level of risk should be weighed carefully in relation to the returns sought. Very simply, there is trade-off between risk and return.

That is why a customized asset allocation strategy is such a powerful tool. Generated by structured, sophisticated methodologies and state of the art software, it takes into account your comfort level with risk and allows the potential to maximize returns over the long run. It also analyzes how different investment categories behave in relation to each other under different market conditions.

Take a look at the volatility of the two hypothetical portfolios below. This is how they differ:

  • The first invests in a single asset category
  • The second is diversified over two low correlation asset classes to reduce volatility
The software used to create asset allocations for clients is the same tool that is used to recommend portfolios for some of the nations largest pension plans. Based on the principles of Modern Portfolio Theory (MPT) originally developed by Nobel Laureates William Sharpe and Harry Markowitz, this software seeks to identify optimum blends of asset categories under a wide range of economic conditions, over various periods of time.

Basically, the software is performing calculations to determine “what if” results under widely varying market conditions. At the conclusion of the calculation cycle, the portfolio with the strongest probability of producing the highest returns at a given risk level is judged to be optimum. The illustration below demonstrates the typical analysis.

While the asset allocation process is very sophisticated, it is based on a simple yet powerful idea. Potential investment returns increase in proportion to risk. Along the risk/return spectrum, there are theoretical portfolios (asset mixes) that provide the optimum return for the amount of risk taken. This curve of optimum results is called the efficient frontier.
Our software uses a mean variance optimization program that creates an optimum portfolio for any point along the efficient frontier that corresponds to your acceptable level of risk. As input, the model uses expected return, standard deviation and a correlation of asset returns. Standard deviation measures volatility of returns in relation to the mean. For example, an asset category with an expected return of 10% and a standard deviation of 15% will experience a range of returns –5% to +25% approximately two-thirds of the time. Correlation measures how returns for asset categories behave in relation to one another. Asset categories having returns that generally rise or fall together have a positive correlation, while those that move in the opposite direction have a negative correlation.

The challenge is to balance the amount of risk an investor is willing to take against the rate of investment return needed to reach a financial objective. As described earlier, selecting a blend of investment categories (asset allocation) dampens risk. Time is also an important component to risk. Simply put, the longer an investment strategy remains in place the more likely a portfolio is to achieve the long-term expected return.