Our Services

Management Service

Investment Program

Management Service Description

Our Tactical Asset Management System (TAMS) program includes:

• TAMS is based on Harry Markowitz and Bill Sharpe’s Modern Portfolio Theory, for which they were awarded the 1990 Nobel Prize in Economics.
• Portfolio update meetings, annually, semi-annually, or quarterly, at client’s request.
• Quarterly consolidated reports. Assuming all accounts are managed, these reports will have IRA and non-IRA accounts included and will report allocation percentages as well as performance per investment, category, and total portfolio. This is the only way clients can receive such a consolidated statement. The mutual funds, IRA trustee, and brokerage accounts only report the assets in their particular account. For mixed accounts (some managed and some unmanaged), we can produce consolidated reports upon request.
• Investment allocation statements at the beginning of the contract period (estimated time of one (1) hour, primarily in discussing client risk tolerance and explaining the asset allocation selection process). This asset policy statement will set customized targets for your individual account toward which we manage.
• Asset allocation services. This will include quarterly "rebalancing," if the end period allocations deviate more that 4% from the target positions. Any repositioning will only occur with the approval of the client. This is a variation of the "sell high, buy low" strategy

To summarize:

• Meetings, available four (4) times per year depending on client’s specific program
• Unlimited telephone access to myself or my staff, as necessary
• Initial policy/allocation selection
• Quarterly consolidated statements
• "Rebalancing"
• Annual review of investment objectives
• Review or setup of income distribution program, as applicable
• Re-registration of investment positions in the event of the adoption of a living trust or death of an owner
• Access using my toll free 866 telephone services (866 – 8 – ASKHOW).
• Schedule D tax service listing previous year transactions/gains/losses
• Additional mailings (in addition to the quarterly newsletter) on items of topical interest

The above services would comprise the complete service. For clients with account sizes smaller than $100,000, semi-annual or annual meetings would be adequate with consequent reduction in time due to less frequent "rebalancing." The fees would also be less.

All clients, whether or not they enroll for these additional services, will receive the Financial Network quarterly newsletter, annual meetings to discuss the performance of their investments, and routine access to my staff and myself for account servicing.

Investment Service Description

Asset Policy (asset allocation, diversification) is the most important investment decisions:

Asset Allocation or the selection of different asset classes and the proportion allocated to each asset class will determine 91.5% of your eventual investment success. This was conclusively demonstrated by Brinson et al in their two articles in the Financial Analysts Journal (May-June 1991). Asset Allocation is the overwhelmingly important decision you have before you. Studies have shown that day to day management of your assets and the particular mutual fund or stocks, international stocks, cash, fixed accounts, etc. are important but they are a secondary decision. Setting up your program right from the beginning, using Strategic Asset Allocation, may be the best approach.

* Asset Allocation, which is driven by complex, mathematical models, should not be confused with the much simpler concept of diversification.

Modern Portfolio Theory (MPT) is the only asset allocation system ever honored with the Nobel Prize in Economics.

Harry Markowitz and William Sharpe developed MPT at the University of Chicago in the early 50s and in 1990, they were jointly awarded the Nobel Prize in Economics for their work. The Markowitz Optimization Model for portfolio selection and the Capital Asset Pricing Model developed by Sharpe, are together called the MPT. It is an effective mathematically disciplined way to assign assets to different categories and to "optimize" your program while attempting to achieve the most profits from any level of risk. The system we employ, based on MPT, is used to consult with you on your program. If asset allocation is your main decision, isn’t it critical to use an advanced system to do the allocation? This is why we use a strategy based on the only Nobel Prize-winning technique to assist you with your financial future.

You can gain additional benefits by using our Tactical Asset Allocation management system.

Our proactive management approach uses a strategy based on MPT to manage your program on an ongoing basis. Your money needs attention to perform at its best. The system we employ used the strategy based on the MPT approach to analyze your allocation on a quarterly basis and to make adjustment based on the deviation from our target percentages. These changes are infrequent, occurring less often than quarterly, and seeks to keep your risk/return position similar to that of when you enrolled (typically conservative, but that is up to you). There can be, of course, no guarantees.

Call me for information at (866) 827-5469 or by e-mail at Askhow@ErmanRetirementAdvisory.com. There will be no cost to you to talk to me about the most important financial decision you will ever face.