Investment Philosophy
We started Uptown Capital Advisors because much of the current financial advice given by large firms seems more concerned with maintaining large profit margins than with individual client success. We believe clients are entitled to full and honest disclosure of their investments and their costs. We don't make unrealistic promises, and we don't receive kickbacks or referrals for pushing certain investment products. We don't pretend to know exactly what the market will do over the short-term or which individual stocks or sectors will outperform the overall market. No one knows.
What we do know is that academic research shows that index-based investing is statistically superior to active management over an investment horizon. Most active fund managers and their investors underperform their relevant benchmarks over time.
We do not gamble or take extra risk with clients' money while hoping we can "outperform." We don't churn accounts or place clients in expensive hedge funds or illiquid "alternative investments," and we never tell clients our goal is to "beat the market." Rather, we optimize market returns by zealously managing costs, reducing capital gains taxes and rebalancing your portfolio.
No one can control financial markets. But together we can control four factors that are absolutely critical to your investment success:
(1) Asset Allocation – For each client, we spend significant time carefully considering existing assets, income, investment objectives, liquidity needs, risk tolerance, and tax situation. Once we thoroughly understand a client's financial situation, we develop an asset allocation plan suited to that client's individual goals and needs.
(2) Investment Costs – Investment costs include more than the fee paid to a financial advisor. The cost of the underlying funds in a portfolio – referred to as an expense ratio – impact a portfolio's return. The lower your investment costs (advisor fee plus expense ratio), the greater your net returns. Our advisor fees and the expense ratios of our portfolios are well below national averages. Because our services are cost-effective, more money remains in client accounts.
(3) Tax Efficiency – Capital gains taxes can significantly reduce investment returns over time, and awareness of tax efficiency is integral to properly managing a portfolio. We maximize the tax efficiency of your portfolio in three ways. First, we invest in index-based ETFs (exchange traded funds), which are more tax efficient than traditional mutual funds and far less likely to distribute capital gains at year-end. Second, our portfolios have low turnover rates (ie. buying/selling of securities), resulting in fewer short-term capital gains, which are taxable at ordinary income rates. Finally, for clients with both taxable and qualified accounts (IRAs), we use asset location models – placing higher-yield investments in the tax-advantaged accounts – to increase after-tax portfolio returns.
(4) Emotions – We help you manage the inevitable emotional swings that come with unpredictable markets by ensuring your portfolio matches your risk tolerance and focusing on your long-term objectives.
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