RoseCap Investment Advisors, LLC The Next Generation of Investment Advisors

Transcription

1 8 RoseCap Investment Advisors, LLC The Next Generation of Investment Advisors PRESENTATION TO: Palisade Risk Conference Monte Carlo Resort & Casino Las Vegas, NV November 7, 2012

2 About the Firm Registered investment advisor in the states of Colorado & Georgia. Accredited with both CPA and CFA designation. Independent investment advisory (not affiliated with a larger bank or financial institution). Fee only compensation structure. Qualified third party custodian (TD Ameritrade Inc. Member FINRA/SIPC/FNA).

3 The Next Generation of Advisors Focus on Asset Allocation We believe investment policy explains over 95% of the variation in returns over time. Utilize ETFs that target specific asset classes and sectors. Strong focus on correlations between asset classes. Core + Satellite Approach Create efficient portfolios using ETFs to represent asset classes. Monte Carlo simulation and financial modeling are primary risk management tools. Forward Looking Data Traditionally returns have been projected linearly based on average historical returns for an asset class. RoseCap utilizes an expected return calculated based on current macro and microeconomic data. Reduce Total Management Fees Invest using primarily low cost securities, such as ETFs. Use of commission-free ETFs to establish core allocation. Minimize portfolio turnover. Real Fiduciary Responsibility RoseCap is not affiliated with larger bank or financial institution. No incentives to place client assets in bank products or push additional services. RoseCapMission Statement: RoseCap sgoal is to give our clients the highest probability of achieving their investment goals.

4 Typical Services & Clients Services for Clients include: 1) Asset/Portfolio Management 2) Financial Planning Target Clients Include: 1) Institutions & Individuals ( > $1MM of investment assets) 2) Alternative Asset Investors a) Private Equity b) Real Estate c) Other Cash Flow Producing Assets

5 The Next Generation of Investment Advisors PORTFOLIO MANAGEMENT Note: Graphics used in this presentation are for illustrative purposes only and are not representative of actual or expected portfolio returns. Information included is entirely fictitious and does not constitute investment advice or recommendations, and should not be relied upon in any way. The methods presented herein are simplified versions of the methods actually used by RoseCap Investment Advisors, LLC and are not meant to serve as a guide for performing investment management, portfolio management, of financial planning services. In no way does this presentation constitute investment advice. All numbers presented are for presentation purposes only. Making investments involves risk and past results are not a guarantee of future performance.

6 RoseCap Core Beliefs I. Risk in portfolio management is defined as uncertainty in future cash flows (more uncertain = higher risk). II. Goal: Maximize expected return for a given level of risk (or vice versa). III. Asset allocation account for approx. 95% of total portfolio returns. IV. Every investment is a set of statistical assumptions (CME). a) Probability curve of future returns. b) Relationship of each security with other securities in the portfolio.

7 Quantitative Risk Assessment - Simple Risk Assessment - Expected Return - Dispersion of Returns - Monte Carlo Simulation s of Iterations - 95% Confidence Interval Assumptions Initial Investment $500,000 Expected Return 5.708% Std Deviation of Returns 8.000% Model Iterations 10,000 Fees & Expenses 1.500% Value at Risk %s Top Threshold 5.0% Bottom Threshold 95.0%

8 Use of Exchange Traded Funds Benefits of ETFs in Asset Allocation Approach 1) Lower Expense Ratios 2) Tax Efficient 3) Intra-Day Liquidity 4) Specific Asset Class Exposure Use individual stocks/bonds/other as satellite investments.

9 Efficient Frontier of Risk Assets - Perform Monte Carlo simulation on sample portfolios. - Provides expected return and standard deviation of the portfolio. - Utilize different combinations of asset classes to and in varying amounts in order to achieve investment goal.

10 The Next Generation of Investment Advisors FINANCIAL PLANNING Note: Graphics used in this presentation are for illustrative purposes only and are not representative of actual or expected portfolio returns. Information included is entirely fictitious and does not constitute investment advice or recommendations, and should not be relied upon in any way. The methods presented herein are simplified versions of the methods actually used by RoseCap Investment Advisors, LLC and are not meant to serve as a guide for performing investment management, portfolio management, of financial planning services. In no way does this presentation constitute investment advice. All numbers presented are for presentation purposes only. Making investments involves risk and past results are not a guarantee of future performance.

11 Purpose of Financial Planning Financial Planning Beneficial for: 1) College/Education Saving & Spending 2) Retirement 3) Tax Efficiency 4) Asset Mapping 5) Developing Portfolio Strategies a) Return Requirements b) Risk Tolerance Ability to Take Risk c) Liquidity * Financial planning done with Excel based model and Palisade

12 Financial Planning - Inputs - Goal is to assess impact of multiple variables and investment strategies on client s future net worth. - Includes correlation of key profit/expense centers. Salary + Bonus Commission Base salary Estimated bonus range Commission income based on number of deals closed, successful sales, etc.

13 Financial Planning Inputs Expenses -Expense items can be projected linearly, or customized to reflect true client circumstance.

14 Financial Planning - Outputs - Output for client includes: - Portfolio performance projections - Liquidity needs - Tax information / tax efficiency - FinancialRISK ASSESSMENT!

15 Financial Planning - Simulation - Simulation distribution matched to most closely describe the nature of the cash inflow/outflow.

16 QUESTIONS? 8 RoseCap Investment Advisors, LLC The Next Generation of Investment Advisors 244 N. 7 th Street, Suite E Grand Junction, CO o: (970) c: (404)