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October 11, 2018
2019 Retirement Plan Contribution Limits
November 7, 2018

Investor Series – Putting It All Together

Although there may be the main five “P’s” , these are primarily at the fund level. We still need to “Put it all together”, call this the bonus “P”. The due diligence doesn’t stop after the questions of Process, Performance, People, Parent, and Price are answered. Managers may come and go, fund performance may be below expectations, and the parent company may fall on hard times… but the point is that we continuously monitor for circumstances that could ultimately lead to replacing a fund. Our Investment Committee meets on a quarterly basis specifically to identify these circumstances. If we are in the vetting process of a new fund, we discuss how the fund will holistically work with the other funds in our portfolio. This is also a combination of art and science. For example, the art is knowing what role we think it should play in our portfolios and the science is running the statistics (much like in the Performance “P”). We do this to see how the fund could influence performance based on risk and return characteristics. Scenario testing is also helpful here as well since it allows us to see how the portfolio could possibly react in a potential bear market, rising/falling rate environment, market crash like 2008, etc. Knowing how a portfolio could react in certain economic and market climates is critical to its overall success. Obviously, even with all the analysis in the world, the risk of selecting a fund that doesn’t fit still doesn’t disappear. The Island of Misfit Funds can still send a clunker every now and then, which doesn’t tend to be as warm and fuzzy as the Rudolph version from the 60’s. The point is surprises can still happen. With a disciplined vetting approach and a dedicated team however, that risk becomes greatly reduced.


Griffin Sheehy, Financial Analyst

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