We believe in long-term investing. If there is a known need for money within a five-year time horizon, it should be kept in a low-risk investment such as a money market account, CD or high-quality bonds or bond funds. For the stock portion of a portfolio, no-load mutual funds and exchange-traded funds—with their built-in diversification and low trading costs—are often the best vehicles. We also look for funds with low turnover rates to minimize taxation, as well as funds with low expenses.
We do not adhere to the philosophy of market timing, but we do recognize that different market climates can produce different opportunities, especially in the midst of euphoria or hysteria. We strive to make portfolio changes at times of market extremes. Benefits accrue as stocks and bonds eventually move from excesses toward their historically established levels of return. This is often referred to as “reversion to the mean”. Over- and under-performance of various asset classes can only last for so long (see tech stocks late 90’s or housing late 00’s) before it returns to its long-term averages. By periodically re-balancing, taking profits on out-performers and allocating into sectors of under-performance, better long-term results can be achieved for our clients.
In certain times we may tilt toward more defensive investments and act more deliberately. We will however, leave chasing the hot new stock or fund manager to Jim Cramer, and remain focused on achieving our financial objectives. After all, investing is a means to an end, not the end itself.
O'Brien Asset Management, LLC 382 Goodwin Road Eliot, ME 03903 Phone: (207) 457 0346
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O'Brien Asset Management, LLC. 382 Goodwin Road, Eliot, ME 03903 Phone: (207) 457 0346. Email: info@obrienam.com
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