Investment Management Services
Alexander Randolph Advisory, Inc. is an investment advisory firm registered with the Securities and Exchange Commission (SEC) that provides investment management services for both individuals and institutions on a fee only basis. At the end of 2023, we managed approximately $361 million in client assets.
Financial Education is Your Most Important Investment
We begin by educating you about the potential risks and returns offered by different types of investments. We then work with you to understand your investment objectives and develop risk constraints that are appropriate for your personal portfolio.
From our experience, unrealistic expectations eventually lead to disappointments that cause clients to prematurely abandon investment strategies. It is important to understand that most investments have risks and that those risks not only may result in investment losses, but periodically will cause losses to occur.
Having realistic investment objectives and a well-diversified portfolio customized to address your personal needs are essential for realizing your long-term financial goals.
Our Investment Management Process Customized to Your Personal Needs
Your personal risk profile is used to establish a target asset allocation for your portfolio that defines the percentage of the portfolio to be invested for growth versus income. It is critical to establish a target asset allocation that is consistent with the level of risk you can afford to assume and are comfortable assuming.
We then construct a diversified investment portfolio that is consistent with your target asset allocation and personal risk profile. Additionally, your personal income tax situation is taken into consideration to make optimal use of tax-advantaged investments with the objective of maximizing after-tax, risk adjusted returns.
Once an initial portfolio is constructed, it is monitored and managed on an ongoing basis.
The Benefits of Our Investment Management Services
1. Rebalancing to Reduce Risk and Increase Returns
Rebalancing a portfolio back to its target asset allocation after the performance of the stock and bond markets diverge enables us to maintain a prudent level of risk and take advantage of financial market volatility by purchasing fundamentally sound investments when they are trading at depressed price levels.
For instance, after a significant rise in stock prices, stocks typically become a larger percentage of a client’s total portfolio than is appropriate. Rebalancing would then reduce the amount invested in stocks and increase the amount invested in bonds. Conversely, after a significant decline in stock prices, it is often appropriate to increase the amount invested in stocks and reduce the amount invested in bonds.
This process, which is commonly known as rebalancing, typically results in selling securities when they are trading at higher price levels and buying securities when they are trading at low price levels in a disciplined and systematic manner.
2. Proprietary Research and Independent Decision Making
We purchase and liquidate securities when our proprietary research indicates doing so is likely to increase investment returns or reduce the risk of loss. Most importantly, we make independent decisions about every security purchase and sale regardless of whether such moves are consistent with the consensus opinion of other investment professionals. In fact, during the last three decades, many of our most successful investment decisions are the decisions that have conflicted the most with the consensus view.
The difference between the 52-week high and low prices for many stocks is often 30% to 50%. From our experience, such price changes occur far more frequently and to a much greater extent (in the short term) than the economic outlook for the business(es) of most companies. When such changes cause a company’s stock price to fall significantly below a level we believe is appropriate in view of the company’s business prospects, the company’s stock is attractive and should be purchased. When the price rises significantly above what we believe is an appropriate level in view of the company’s business prospects, the stock is unattractive and should be sold.
Monitoring security price movements is relatively easy. Conducting research to develop an opinion of a company’s business and financial prospects requires far more time, experience and expertise.
For more detailed information about our firm’s investment management services, the methods of analysis employed and the proprietary research we conduct, please review our Form ADV Part 2ABrochure.
Our Fees
Our firm provides investment management services on a fee-only basis. We do not accept compensation for the sale of securities or other investment products, or asset-based sales charges or service fees from brokerage firms, mutual funds, or other investment vendors.
Investment management fees paid by our clients represent 100% of our firm’s compensation for providing investment management services.
Annual fees charged for investment management services are based on the following schedule as a percentage of assets under management:
1% of the first $500,000 of assets under management,
plus 0.5% of assets under management in excess of $500,000.
All of the investments we manage for clients are held at third party discount brokerage firms or are directly held at no-load mutual funds or no-load tax-deferred annuities in order to minimize transaction costs.
To learn more about our investment management services contact us today.
