Investment Advice

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Confidence in Knowing We Care
 

As CERTIFIED FINANCIAL PLANNER™ professionals and independent investment advisors, we offer you the financial confidence of knowing that we make investment recommendations that are in your best interest. This is evident by the diversification of investment products, companies, and tools we use to pursue your goals and objectives. Just as a hammer is not the right tool for every job, there is no one investment product that is a perfect fit for all of your financial needs. 

We will work very hard to gain a complete understanding of what you are trying to achieve, and only after that will we make specific recommendations. You will have a full understanding of the benefits and costs of each and every one of our recommendations.
 

Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Tactical Asset Allocation Models - MC Select Portfolios

Each MC Select account holds a carefully constructed portfolio of underlying securities, meticulously chosen to provide exposure to various asset classes. This selection may include domestic and international equity and fixed income asset classes, as well as alternative asset classes, such as commodities, real estate, structured investments, and liquid alternatives fund strategies. This approach allows clients to benefit from a comprehensive and well-rounded investment strategy that seeks to capitalize on opportunities across diverse sectors and markets.

Advisors collaborate with clients to align their risk tolerance, time horizon, and investment objectives with MC Select portfolios. McCarthy & Cox leverages both local, in-house, investment research, as well as the research and resources of Commonwealth’s research team to develop a robust and disciplined methodology. This approach is designed to accommodate client preferences while maintaining a rigorous investment process.

The outcome of this collaborative effort is a collection of allocation models within McCarthy & Cox Select that aim to deliver consistent, long-term, risk-adjusted returns to investors across the entire risk/return investment spectrum. These allocation models are carefully crafted to consider the unique needs and goals of each client, ensuring a personalized and tailored investment approach. McCarthy & Cox Select strives to provide investors with portfolios that align with their specific requirements while also aiming to achieve steady and sustainable returns over the long term.

Investment Philosophy

The McCarthy & Cox Research team collaborates with a diverse group of analyst partners to facilitate a comprehensive due diligence process in the development of our model portfolios and underlying investments.

By leveraging the expertise and insights of our analyst partners, the McCarthy & Cox Research team ensures a rigorous evaluation of investment options. This due diligence process involves a meticulous assessment of various factors such as performance, risk profile, investment strategy, management team, expenses, and other relevant criteria. The process consists three steps: Portfolio Construction, Investment Selection, and Ongoing Monitoring, Rebalancing, and Reallocation.

Step 1: Portfolio Construction

When building our tactical investment portfolios, we consider a wide range of factors, which encompass the present economic and investment landscapes both domestically and internationally. We carefully assess the potential for positive returns compared to the associated risks for each available asset category.

In the construction process, we thoroughly analyze the prevailing economic conditions and investment trends, considering how they may impact various asset classes. By examining the current state of both domestic and international markets, we gain valuable insights into the opportunities and challenges that exist within each category.

Additionally, we evaluate the potential upside and downside risks for each asset category, carefully weighing the potential rewards against potential losses. This assessment is crucial in creating portfolios that strike a balance between maximizing returns and managing risks effectively.

By considering these multifaceted factors, we aim to construct tactical investment portfolios that are well-positioned to navigate the dynamic investment landscape. Our objective is to capitalize on opportunities while actively managing risks, ultimately seeking to deliver optimal investment outcomes for our clients.

Step 2: Investment Selection

The research process begins with quantitative screening. The primary objective of this screening is to narrow down the investment options by identifying those that meet specific criteria and have demonstrated consistent, risk-adjusted returns over time.

Once the screening is completed, the remaining investment choices undergo a thorough evaluation. This evaluation encompasses the application of a risk-adjusted scoring system to assess the investments. The evaluation considers various factors, including relative performance versus peers and benchmarks. Additionally, thorough qualitative research is conducted to further narrow choices.

By utilizing a risk-adjusted scoring system and considering multiple performance metrics, we aim to comprehensively evaluate the investment options. This approach allows us to gauge not only the returns generated by each investment but also how they compare to relevant benchmarks and peers. Moreover, we analyze the consistency of an investment's style to ensure alignment with our desired investment approach.

The purpose of this meticulous evaluation process is to identify investments that exhibit strong performance, align with our investment objectives, and have consistently demonstrated a favorable risk-adjusted profile. By incorporating these rigorous evaluation criteria, we strive to select investments that possess the potential to deliver attractive returns while effectively managing risk.

Step 3: Ongoing Monitoring, Rebalancing, and Reallocation

Continuous monitoring of the McCarthy & Cox Select portfolios is conducted to assess their performance in relation to their investment objectives. This ongoing evaluation incorporates various factors, including absolute and relative performance, risk tolerance, attribution analysis, and style analysis.

By scrutinizing both absolute and relative performance metrics, we gain insights into how the portfolios are performing compared to their intended benchmarks and the broader market. Risk tolerances are also considered to ensure that the portfolios are aligned with clients' risk preferences.

Attribution analysis and style analysis are employed to delve deeper into the portfolio characteristics. These analyses help us understand the contribution of different investment components to the overall portfolio performance and evaluate the consistency of the portfolio's investment style.

If the portfolio characteristics and asset weightings deviate from the target levels, rebalancing is implemented. This involves adjusting the asset weightings within the portfolio to realign them with the original objectives. This proactive approach ensures that the portfolios remain in line with the desired asset allocations and risk profiles.

Moreover, as the investment and economic climates evolve, adjustments to the asset categories within the portfolios may be made. This flexibility allows for the addition or removal of asset categories to adapt to changing market conditions and investment opportunities.

Through this ongoing monitoring, evaluation, and proactive management, McCarthy & Cox aims to maintain portfolios that align with clients' objectives, optimize performance, and adapt to the ever-changing investment landscape.