TBH Global Asset Management helps affluent families become and stay organized as they navigate their financial life. Just as you would contact a concierge at a hotel we urge our clients to contact us regarding any financial matters. Often our clients contact us just so they can be referred to other professionals because they know how we work and the professionals we associate ourselves with. As a client of TBH you will have 24/7 access to discuss your financial affairs. Your experience is of upmost importance to us.
We believe one of the most important ingredients in an advisory relationship is crafting a highly personalized financial plan. Clients that utilize our services to their full extent are clients who allow us to produce comprehensive financial plan strategies, and do our work towards those planning objectives.
Our job is to learn and discover as much as we can about your desired destination, so we can help construct a plan to get you there. This process starts with a deep dive into your ambitions, desires, needs, and fears. Once your objectives have been established, we focus on mapping out the best route and serve as the guide along the way. Financial planning can range from simple to highly complicated. We understand the personal nature and complexities of financial planning. Our experience and commitment to staying informed give our office the resources needed to develop and execute a plan that’s right for you.
Below are the six areas commonly associated with financial planning. Regardless of occupation or complexity of your situation we can assist in helping you achieve your goals while addressing your concerns.
We don’t have a perfect definition for risk because one does not exists. Risk means different things to different people at different times. You cannot define risk or risk tolerance without first assessing the unique characteristics of the investor in question. Risk is personal.
Control What You Can Control
We are big believers in focusing on what you control as a form of risk management. While we’re never going to be able to perfectly measure risk, one of the best ways to manage risk is to have a comprehensive plan in place. Having a plan doesn’t mean you can eliminate risk altogether. That’s impossible. Taking risk makes sense. You just don’t want to get into the habit or taking unnecessary or unacceptable risks. Now all you have to do is figure out what those unacceptable risks are.
Whether you are accumulating wealth or preserving what you have earned, risk management is the defining principle of our investment philosophy. We view everything through the prism of risk management and the current and future liquidity requirements of our clients. Why? Because risk matters. It is a mathematical fact that losses matter more than gains. We’ve taken this principle to heart and have built our investment philosophy around this point. We take a macro view of the markets and “dial up” or “dial down” risk when the market environment demands action. The goal is to get you where you want to be with the least risk possible.
At the core of each solution is the strategic asset allocation, not just among stocks, bonds, and cash, but other assets as well. Combining the right mix of investments is key to managing risk over the long-term. However, shorter-term tactical shifts are often required to help keep risk in-check, and you on the right path. We insatiably focus on the market environment to determine what the strategy should be moving forward. This process involves searching for opportunities that may not be currently in vogue or dominating the headlines of financial media. We believe the end result is an investment strategy that you feel comfortable with, in both good and bad times. An investment strategy that helps you sleep at night. One that provides you with peace of mind.
The Power of a Dollar
We also spend significant time addressing the most important driver of Investment Management and a term you probably don’t hear that often – Purchasing Power. The real definition of money is “purchasing power.” $1 million, if insufficient to buy a car, is not more desirable than $100 that can buy 50 cars. (Everyone intuitively should know this.) Currency is not money; it is the product used to exchange money. The objective of investing then is not to create or preserve a fixed dollar amount; it is to facilitate the adequate ability to purchase what one wants with their funds. Therefore, to ignore inflation and the real value of money would be financial malpractice.
All of this is done in an unconflicted environment where our fiduciary duty mandates we focus solely on you and your investments.
We will discuss Insurance, Liabilities & Healthcare to name just a few of the risk management items that affect us. Just above, you noticed how many times we discussed risk around managing investments. There is risk in almost everything we do financially. You cannot eliminate risk but you can definitely employ strategies to minimize risk. In nearly every meeting with clients we address risk and always work to achieve the client’s goals while managing risk in the best manner possible.
A central underpinning of classical economic – and investing – theory is that people act rationally to secure outcomes in their best interest. Starting in the mid-1990s, however, research by psychologists and other social scientists has shown that rationality doesn’t always rule. Perhaps because the human brain has difficulty accurately assessing risk and probabilities and because emotions powerfully affect our thinking, people are often irrational in their economic and investing decision-making, usually in specific and predictable ways. Behavioral economics and behavioral finance are the terms used to describe the study and analysis of these newer ways of explaining our financial and economic interactions. It has become an integral part of the discussions we have with clients.
To give you one example of Behavioral Finance, and one that we have all encountered, would be ‘Herd Behavior’. Herd behavior can be defined as the tendency for individuals to mimic the actions (rational or irrational) of a larger group. Individually, however, most people would not necessarily make the same choice.
This was most evident in the late 1990’s when the dot com bubble began. Never before had so many people poured money into internet related companies without knowing anything about their business model. The driving force that seemed to compel these investors to sink their money into such an uncertain venture was the reassurance they got from seeing so many others do the same thing. “Everybody’s doing it and making money, so it must be right.” Herd behavior! Bubbles are the extreme example of herd behavior. Many investors join mini herds and demand the latest hot stock or hot mutual fund. When prices break, other investors will join a herd of sellers. Obviously, herd buying or selling can be injurious to financial health.