DOLLARS AND SEN$E

Product vs. Process

BY CHRIS HANLY

Investment Consultant, Gary Goldberg Financial Services

As the first quarter of 2012 comes to a close, I’ve been meeting with clients regularly to review their portfolios and discuss our results. Needless to say, there’s been a fair amount of smiling and sincere thanks. While we will certainly pat ourselves on the back for these accomplishments, it doesn’t hurt that the markets are up 10+% YTD. I often express to clients that markets make you money, while working with a money manager helps you keep your money. It’s no secret that markets do not always go straight up, and when a down cycle occurs, being properly positioned can make a significant difference in portfolio performance. This is where it’s important to understand the difference between a product and a process.

Traditionally, and still today, investors are often “sold” a product – an investment that carries a commission at the point of sale; for example, a front load (A share) mutual fund. Naturally, investors are apprehensive to make changes soon after paying this commission. Although investors may be able to “exchange” the recently purchased fund within the same fund family without incurring additional or new commissions, this can hardly be considered an investment strategy or a well thought out process. Moreover, given what we know about human behavior, it is not surprising that most investors don’t do anything at all when this occurs, other than to cross their fingers and hope that their recent investment makes a comeback.

As a result of not having an investment process, a strategy that is flexible enough and disciplined enough to be successful in various market cycles, investors are often short-changed, under-perform the broader markets, and often fail to meet their investment goals and objectives. Having amassed over 115 years of combined investment experience, the Gary Goldberg Financial Services Investment Committee members understand the utmost importance of having a consistent, replicable, disciplined investment process. Investors who work with me and my firm benefit from the use of our proprietary and trademarked Montebello Process®. Utilizing this process, I help identify a client’s precise investment needs and subsequently break down their investments into three distinct baskets thereby ensuring monies are set aside and prudently invested to cover their short, intermediate, and long-term needs. Generally we feel the short term basket should have little or no market risk and be completely liquid. As for the intermediate and long term baskets, I help the client select from among the 24 different model portfolios created and managed by GGFS Investment Committee. Our experienced investment committee makes changes to the underlying investment choices, adjusting the strategy to reflect market and economic changes and their view of world events that are often the cause of market volatility. If you are interested in learning more about The Montebello Process® and how I might be of help to you, please call or e-mail me.

Christopher Hanly is an investment consultant with Gary Goldberg Financial Services in Suffern can be reached at (845) 368-2900 ext. 247 or [email protected].

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