Managing your own investments in today’s economic environment is becoming ever more difficult. With more than 10,000 mutual funds alone in the market place, getting ahead and staying ahead is tough to do. Too often, people will make the mistake of building a portfolio one good idea at a time. Such portfolios are usually heavily tilted towards those investments that have done well in the recent past and are rarely well positioned for the future. While investment success depends on being able to follow a consistent investment philosophy, applied systematically year after year, this proves difficult for most busy people with other interests and responsibilities. 

One of the many advantages of CFS is that our clients have the benefit of databases and portfolio tracking systems that would be too expensive for the average investor to justify. These systems allow us to perform sophisticated analytics on the portfolio's we manage, to ensure that they are performing according to the plan. 

Having superior technologies and being internet based, means CFS has exceptional resources that are not only broader than those available to a traditional financial advisor, but more easily and quickly accessible as well. Our technology tools help us not only find good investment opportunities, but also to track them. Our cutting edge tracking is done automatically and electronically so that we do not have to rely on memory manual systems to do it. Each day our technology systems are filled with press releases, earnings changes, and key stories affecting stocks, institutional managers, and or stock and mutual funds we own or are considering. This also includes our client dashboard, where our client's can view various investment and financial reports, including daily downloads of 401k and 529 college savings data.

Our Investment Process

Investment success requires the systematic and disciplined implementation of a consistent investment philosophy. Our investment planning process will help you build the investment portfolio that moves you more rapidly towards your financial goals and allows us to implement tactics to control risk while improving return. We actively manage the portfolio to continuously take advantage of opportunities the financial markets provide us, while avoiding the steep losses which can negatively impact your returns. This includes the following process:

Developing the Investment Plan

We begin by asking you detailed questions regarding your risk tolerance level, time horizon, prior experiences, tax situation etc. and then start the development of a formal investment policy statement. This is a written master plan for your portfolio, and may include the following:

• A formal description of your goals for the portfolio
• Target returns and maximum acceptable risk
• Asset allocation to be used
• Specific investment constraints (e.g. disallowed investment vehicles)
• Benchmarks to be employed
• Monitoring and reporting procedures
• Specific investments recommended
• Rebalancing procedures
• Future growth projections

Asset allocation refers to the process of determining how much of your portfolio will be invested in different types of investments or market segments. Here is a partial list of the asset classes in which we invest.

• Cash and money market investments
• Government and Corporate short-term bonds
• U.S. large company growth and value stocks
• U.S. small company growth and value stocks
• International large and small, growth and value stocks

Investment Selection

Once an investment policy has been adopted, we implement the asset allocation plan through the selection of specific investment vehicles to fill each asset class. These investment vehicles will most frequently take the form of no-load, no transaction fee mutual funds. We use some of the following criteria when selecting funds:

• The fund must represent a clearly-defined market segment
• The fund must remain fully-invested at all times
• The fund must have low fees and expenses
• The fund must have a consistent performance record

In addition to the many funds that are available to the general public, we have access to a number of institutional mutual funds that satisfy the above criteria particularly well. These funds are normally only available through investment advisor's, and their lower fund expenses can be a tremendous cost savings to our clients. With the typical retail stock fund averaging 1.75% yearly in fund expenses, we can normally cut that in half by using institutional funds, which will increase the overall return to our clients, and/or offset a large portion of our yearly advisory fee.

Monitoring and Reporting

We monitor portfolio's daily, and generate an extensive list of monthly performance reports via our private client dashboard. These reports are highly customized and are based on the high performance standards of AIMR (Association for Investment Management and Research). Your regular monthly account statements will come from the custodian including year end tax reporting. Each client’s portfolio is reviewed and monitored to address potential factors such as changes in the client’s financial situation, tax efficiency, and dynamic changes in the global economy.

Rebalancing

Over time, different asset classes will experience different rates of return, which results in the portfolio drifting away from its target allocation. As needed, we rebalance the portfolio by reducing holdings of those asset classes that exceed their target allocation, and increasing holdings of those classes that have fallen below their target allocation. Rebalancing, if pursued systematically, is a discipline whereby we periodically sell assets that have become relatively expensive, and reallocate to assets that are relatively cheap. Or, put another way, it is a systematic way to “buy low and sell high”.

The Effect of Taxes and Transaction Costs on Rebalancing

In order to minimize the transaction costs and taxable gains generated in client portfolio's, we employ a strategy of “passive rebalancing” whenever possible. Since dividend, interest, and capital gains distributions are paid out by fund investments throughout the year, we accumulate these distributions and reinvest them-but not into the funds that paid them; instead, these go into those funds that are below their target allocation. We do the same with any additional contributions that are made to the account. In this way, the portfolio is rebalanced without generating any taxable gains beyond those that would have been recognized anyway. The process can be reversed when dealing with portfolio's that are making regular income distributions.

Our Philosophy

Asset allocation is the single most important decision for any portfolio, having been shown to explain as much as 92% of the variation in returns.

Asset classes represent broad market segments with distinct characteristics. For example, their would be no point in distinguishing between large and small company stocks if these two asset classes behaved identically (they don’t). In fact, the more dissimilar two asset classes are, the more desirable it is to combine them in a portfolio. Combining the two indexes smooths out the highs and lows and provides a more predictable pattern of returns. Due to the impact of compounding, a portfolio with smoother returns will grow larger than one that exhibits bigger swings.

We also employ a tactical allocation process, which allows us to underweight and overweight certain asset classes. We know certain asset classes will be in or out of favor at any given time. By taking advantage of this movement, we can aid in the reduction of risk and enhance the overall return.We also know that long term markets are driven by fundamentals, and understanding those fundamentals will give us an edge. Certain conditions in the economy and geopolitically can drastically effect the financial markets. Analyzing these conditions accurately leads to superior performance.

Some of the Investment Management Services we Provide

• Daily monitoring of your portfolio.
• Internet access to your account including e-mail alerts, late breaking news, research, and security pricing to name a few.
• Tax record keeping and reporting.
• Check writing and Visa card capabilities.
• A Risk/Reward analysis of current or potential holdings.
• Institutional investments not available to the general public.
• Asset allocation advice.
• High yielding cash management accounts.
• Construction of a detailed personal asset allocation plan.
• Portfolio downloading to Quicken and Microsoft Money finance
  software.
• Order and confirmation processing.
• A low $100k minimum portfolio size requirement.
• Specialized research and information not available to the general
  public.
• Filtering the information overload to provide only relevant
  information.
• In-depth knowledge of the markets.
• Direct access to fund managers and keynote speakers.
• No fee IRA's.
• Timely up to the minute financial news and resources.
• No commissions or sales charges on mutual funds.
• IPO participation.
• Quarterly performance reporting and reviewing.
• E-mail reports and updates.
• Portfolio adjustments based on lifestyle and market changes.
• Understanding of how changing market conditions might affect
  you.
• Comprehensive consolidated monthly account statements.
  
   

Fee Schedule

Our investment advisory fees are very competitive, and are some of the lowest in the industry. Our firm has a low $100k minimum portfolio size requirement. Our yearly management fee covers all of our available services, including a comprehensive financial plan ($1,500 VALUE), unlimited contact with the firm, personal meetings with the advisor, and our extensive client resources to name a few. The management fees are calculated on the total assets we are actively managing for you. (Including any employer plans you are currently participating in) Fees are paid quarterly and are deducted from the money market portion of your investment account.

Assets Under Management

Assets