Portfolio Counseling


Hire a mule with an attention span, not a one-trick pony or a stable of ponies.

Portfolio counseling too often receives only cursory consideration from product-driven specialist investment managers preoccupied with narrowly-defined strategies. On the other hand, consultants and open-architecture advisors provide portfolio counseling and draft investment policies but outsource the actual investment management to a roster of sub-advisors.

Both trends – specialization and open architecture – have merits, but they have also increased the distance between portfolio owner (the client) and portfolio agent (the investment manager). With that greater distance, there is a greater risk of errors in interpretation, errors in implementation, and a diminished sense of agent accountability.

These unhealthy side effects can take root even inside a single money management firm, if that firm creates internal layers between a high volume of clients and a detached series of specialist employees.

Drystone difference:
Drystone brings professional zeal and extensive experience to both portfolio counseling and investment selection without layers of bureaucracy or gaps in accountability.



Stewardship requires attention to detail.

Drystone discipline:
A portfolio exists to meet the real-world needs of its owner. For each client, Drystone prepares and adheres to a customized Statement of Investment Objectives which articulates:
  • return expectations and benchmarks
  • risk definition/tolerance
  • time horizon
  • liquidity/spending needs
  • tax, trust, estate planning considerations
  • client legal duties, e.g. as a trustee or a corporate insider
  • unique considerations, e.g. charitable or family gifting

The client's goals combine with Drystone’s investment analysis to determine the optimal:
  • asset allocation: target ranges for asset mix which allow flexibility but also prevent portfolio drift
  • asset location: if a client has a multi-account portfolio, matching each asset to appropriate account


Understanding client objectives begins the alignment of portfolio agent with portfolio owner.

Drystone difference:
Portfolio managers who understand and care about the owner-objectives of their clients are more likely to have clients who understand and trust the agent-actions of the portfolio managers. This helps to engender the greater investor staying power which many investment choices require to reach fruition and deliver superior long-term returns.

Drystone discipline:
Drystone also wants its relationships with clients to be self-policing in that each Statement of Investment Objectives contains benchmarks and steps to keep Drystone’s management in line with or ahead of client expectations over an appropriate time horizon.

 

Drystone LLC investment portfolio manager