The foundation of our investment philosophy is based on a system that won the Nobel Prize. This philosophy has been validated over time and has been emphasized in our firm since day one. The core of our approach is strategic asset allocation and disciplined portfolio management while customizing to an appropriate level of risk for each client. The result is a portfolio built to maximize growth and stability while minimizing risk and emotion.
In 1990, US Economist Harry Markowitz, William F. Sharpe and Merton H. Miller shared the Nobel Prize for their contributions to financial economics. Markowitz is best known for his pioneering work in modern portfolio theory (MPT) which says that portfolio diversification reduces risk and enhances expected return over time. Modern portfolio theory is at the core of Lowery Thomas’ investment philosophy and approach.
We invest for you according to these fundamental principles:
- Use comprehensive financial planning to drive investment decisions.
- Investment strategy using technical and fundamental research.
- Invest with a long-term outlook.
- Create globally-diversified portfolios that reduce risk and improve return.
- Remove emotion from the investing process.
- Minimize costs including taxes and turnover whenever possible.
Our customized investment and financial plans are flexible to adapt to changes in economic conditions and are monitored closely to ensure the plans fit as life circumstances and goals change. Our initial investment plan along with ongoing analysis and advice from Lowery Thomas are always tailored to our clients’ individual financial situation.
TAX EFFICIENT INVESTING
Our Tax-Smart Approach Improve After Tax Returns
We use more than tax-loss harvesting in managed portfolios to help improve after-tax returns. Our team, with two CPAs on board, takes a personalized approach that is tailored to each clients’ unique financial situation and investment preferences. A proactive approach that occurs year around on a continuous basis is critical to minimize taxes and maximize returns.
At the onset of funding your account with us, we take a look at your existing holdings for ways to integrate them into your managed accounts. Most firms will sell out of everything without taking tax considerations into account. This sell now and ask questions later is done far too often and lacks strategic considerations for what is best for you.
Manage Capital Gains
There are two ways to minimize taxable gains when selling a position. We will look for the highest cost-basis shares and specifically identify the tax lot that lowers your tax liability. In addition, we will check the holding period and take advantage of lower long-term capital gains rates.
Taxable distributions from mutual funds generate taxes in most circumstances. We manage this exposure by owning these assets in tax-advantaged accounts or by avoiding them altogether. We prefer building portfolios with exchange traded funds that are more-tax efficient than their mutual fund counterparts.
Unlike some investing firms, which wait until year-end to search for tax-loss harvesting opportunities, we are looking at your taxable accounts throughout the year. This strategy becomes important when the financial markets drop but recover before year-end. Being diligent in capturing these losses can help in the current tax year and in future years when capital losses are carried forward.
Tax Efficient Account Withdrawals
When funds need to be tapped from accounts for retirement or otherwise, we pay close attention to pulling funds that minimize or eliminate tax implications. Our tax expertise enables us to make tax-wise decisions while assessing what is best from an investment standpoint. Most financial advisers lack the knowledge to make these important decisions in real-time. Withdrawing money and the related effects on taxes and investments is an often overlooked part of managing money. We understand the perils of not assessing both as part of the ongoing goal of maximizing your assets.