Unlike age-old investment firms, Investperity cuts out the stagnant agent meetings, cumbersome paperwork, high management fees and unwanted upselling and cross-selling. Our 100% online approach helps individuals, SMBs and other RIAs achieve their investment goals while minimizing portfolio volatility.
We provide clients with more transparency, a predictable low management fee of 0.5% and useful tools to take control of their financial landscape.
When You Tell Investperity: Your goals, your timelines and your existing investments.
Investperity Recommends: Your monthly contributions needed to meet your goals.
What You Can Expect:
With Investperity, your money is invested in low-cost mutual funds or ETFs. Low trading frequency is used to avoid excessive trade costs and short-term capital gains.
Your portfolios will be managed tax efficiently. When available, the account types will dictate the investments. Highly taxable assets will be placed in tax-deferred accounts while low taxable assets will be placed in non-tax deferred accounts.
Your accounts will be tax-loss harvested on an annual basis to reduce tax expenses due to trading or capital raises for distributions.
Your portfolio will be managed to long-term market cycles. When the market is in an expansionary cycle, your portfolio will be managed to take advantage of the expansionary environment. When the market contracts, your portfolio will be managed to a more conservative allocation.
An investor's goals should drive their asset allocation.
The goals of an investor make the allocation of capital between equity and fixed income. Each goal has its unique qualities. The time horizon, or timeline for when money is needed, refers to the amount, timing of any additional funding, and how the funds should be distributed.
For example, the distribution of funds could be quarterly over a four-year period for education expenses. Similarly, the distribution of a separate goal may be monthly over a 15-year period for retirement.
The individual goals will have their unique timeline for investment allocations between equity and fixed income, each goal's portfolio will become more conservative as the time for recovering from a down market is reduced the closer one gets to the distribution dates of each of the goals.
In addition to shifting the portfolios to a more conservative allocation as they approach their distribution date, the goals allocations between fixed income and equity will change as a response to market dynamics.
Using a proprietary market analysis system, the portfolios will reduce equity exposure and increase fixed income exposure when markets expose a long-term contractionary pressure. In addition to a reduction of equity to enlarge fixed income positions, both the equity and fixed income portfolios will shift to a more conservative structure to help reduce the impact of contractionary pressure. Once the contractionary pressure has receded and the markets expose an expansionary pressure, the fixed income and equity portfolios will shift back to their expansionary allocations, and the portfolios will return to their expansionary allocations between equity and fixed income.
These changes allow the portfolios to stay fully invested in the market while rotating between a conservative portfolio and asset allocation and an expansionary portfolio and asset allocation as market dynamics shift.
The equity portfolios will rotate through contractionary and expansionary allocations.
Contractionary portfolios are built to reduce the impact of a contractionary market cycle. When the equity market is showing signs of a prolonged contraction, one existing for six months or longer, the equity portfolio will shift into a more defensive allocation. When the market is contracting the goal of the equity portfolio is to experience less of a loss of capital.
The fixed income portfolios will rotate through contractionary and expansionary allocations.
Contractionary portfolios are built to reduce the impact of a contractionary market cycle. When the equity market is showing signs of a prolonged contraction, one existing for six months or longer, the fixed income portfolio will shift into a more defensive allocation. When the market is contracting the goal of the fixed income portfolio is to help protect and insulate the portfolio from its equity holdings.
On an annual basis, each taxable account will be reviewed for tax loss harvesting to offset any capital gains that may have been realized throughout the year.
Asset location is a concept of using tax-inefficient assets, high-yield corporate bonds, in accounts that are sheltered from taxation.
Also, tax-efficient assets such as municipal bonds should be placed in taxable accounts where applicable. IRAs are protected from taxable events, which is why placing high yielding assets in them works to the investors' advantage. Also, low yielding assets can be placed in taxable accounts, since their dividends or yield could be taxed annually, thus reducing their total return.
All trades will be made with taxation penalties in mind.
For example, if a trade needs to be placed to raise capital for a distribution, rebalance the account, or rotate asset class positions during a market cycle shift, long-term holdings will be traded first so that long-term capital gains will be realized rather than short-term capital gains. Since long-term capital gains are generally taxed at a lower rate than short-term capital gains, the ordinary income tax for the individual's highest income tax bracket, trading these long-term assets results typically in tax savings for the investor. These savings allow the investor to attain their investment goals more efficiently and effectively.
The assets used in the portfolios are a mix of low-cost ETFs (exchange-traded fund), both index and smart beta, and low expense ratio (under 1%) mutual funds.
The concept behind the portfolio management of each goal-driven portfolio is to reduce costs, use a tax-efficient trading method, and to moderate the number of trades to minimize trading costs.
Individual stocks and bonds are not part of the portfolio management as these assets may carry a higher risk than necessary to help the investor reach their investment goals.