The Grant/GrossMendelsohn
Investment Experience

Step One: Matching Investment Strategy and Expectations The Grant/GrossMendelsohn process begins with a look at where a client’s investments are today, and where they think they are. Often, perception does not match the reality of the client’s current investment situation. Clients might feel that they are conservatively invested, while the portfolio is filled with more aggressive holdings, or vice versa. Every step in our process is designed to create a match between the client’s investment needs and the expectations and their specific portfolio composition. Back to top Step Two: Understanding Goals and Preferences Once we understand where a client’s portfolio is today, we spend time with them learning about their goals, emergency cash needs and comfort level with various types of investments. We also start to familiarize them with our preferred investment vehicles, including open- and closed-end mutual funds and exchange-traded funds, demonstrating how they provide access to virtually every type of investment market. Back to top Step Three: Avoiding Wild Roller Coaster Rides In 1990, the Nobel Prize for economics was awarded for research that revealed a unique relationship among investment risk, reward and diversification. Known as "Modern Portfolio Theory," this research forms an integral part of our investment approach. By actively managing the exposure to domestic and international market capitalization (large cap, mid cap and small cap), investment style (growth vs. value) and market sectors (financial, health care, technology, etc.), we optimize performance while adhering to the risk parameters established for each client. If you think of investing as a roller coaster ride — and it often can be — the application of a diversified strategy utilizing the basic tenants of Modern Portfolio Theory can moderate the effects of sudden and dizzying drops in the market. This is particularly critical for clients who are retired, or who are nearing retirement. Also critical to our past success has been the inclusion of "market neutral" and "hedged" strategies along with non-correlated sectors such as commodities, global real estate, etc. Back to top Step Four: Designing the Strategy We apply the principles of diversification in the design stage by selecting an appropriate mix of asset classes based on the level of safety required. This is the most critical step in the Grant/GrossMendelsohn investment process. Numerous academic studies have demonstrated that over 90 percent of a portfolio’s total return is determined by "category" decisions while less than 5 percent comes from individual security selection. Grant/GrossMendelsohn uses no preset formulas or asset allocation mixes. In order to be fully responsive to the client’s needs, we focus on establishing a strategy for each individual portfolio, controlling its level of risk, and matching a diversified investment strategy to the client’s expectations. Investment strategies for our clients are implemented using a combination of open- and closed-end mutual funds and exchange-traded funds, along with individual taxable and tax-exempt bonds. By integrating tax planning with investment asset allocation, we can optimize retirement cash flow by properly structuring the combination of IRA distributions and other investment income. Charitable giving can also be designed to meet the goals of both the donor and the recipient. Back to top Step Five: Implementing the Strategy With the portfolio strategy and asset mix firmly in place, we seek to maximize the potential return of the portfolio through the careful selection of top-performing no-load mutual funds and exchange-traded funds (ETFs) that match the client’s goals. Why no-load funds and ETFs? For several reasons. First, no-load funds and ETFs are highly liquid and readily available to investors while covering the full spectrum of asset categories. (For those specific strategies not available in the mutual fund or ETF universe, we occasionally utilize the closed-end fund sector.) Second, they can be purchased objectively and independently without the bias of commissions; this assures clients that our decisions are based on each fund’s merits and not our compensation. In selecting individual funds, we monitor a database of more than 7,600 mutual funds. We "grade" each potential fund on a number of quantitative and qualitative measures, including risk, investment style, operating expenses, size, and current and historical rates of return. Only those high-performance funds that offer the potential for continued superior performance are selected. The implementation of the fixed-income (bond) strategy is again individually customized to optimize the after-tax return and meet ongoing cash flow needs. Using its institutional capabilities, Grant/GrossMendelsohn buys "dealer direct," passing through its "wholesale" cost to client portfolios. Individual bond holdings are limited to AAA-rated government agency/mortgage-backed securities or AAA/AA-rated municipal bonds as dictated by the tax bracket of each client. Diversified funds are utilized for higher risk categories such as high-yield or emerging market debt. Back to top Step Six: Managing the Portfolio The Grant/GrossMendelsohn process is dynamic and ongoing. Our team continually monitors funds by considering market conditions, looking for any changes in management or investment style, and reviewing a host of qualitative and quantitative factors. Because we know that our clients’ circumstances and objectives are ever-changing, we pride ourselves in maintaining effective, ongoing communication to stay abreast of any new developments. We adapt our clients’ investment portfolios to ensure that they continually match their current situation. In addition to ongoing monitoring, every client’s portfolio is formally reviewed on a quarterly basis, with reports sent to the client detailing portfolio structure and performance, current market conditions and position changes. Back to top