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We are a private wealth management firm that specializes in offering wealth advice and tools to the investor. Our wealth management firm offers investment opportunities for many types of investors:
- Fiduciaries will benefit from our wealth management advice and wealth management resources. We work very closely with accountants, real estate agents and mortgage brokers.
- Holders of large amounts of personal wealth may be looking for new strategies to grow their bank accounts. Our wealth management resources and wealth management advice can help the enthusiastic investor with private wealth management, and our wealth management advisors can ensure that your estate is handled correctly.
- Day traders and active investors can use our wealth management advice and wealth management tools to assist them with making difficult trading decisions.
- Late investors will benefit from our wealth management resources and the wealth management advisor that wants to make sure that his client is able to retire comfortably.
- Early investors can use our wealth management firm to navigate through the volatile waters of the stock market and ensure that the money they’ve started saving is not lost carelessly or in an unhealthy marketplace.
- The disorganized investor will find that our wealth management advisors can order his or her private wealth management strategies so that the investor can get on the right track again.
Wealth Management Services and Programs
 Service Programs
When you work with us and our wealth management advisors, you will form a long term relationship, one with meaning. Our interests revolve around the concept of helping you with your private wealth management in any way we can. We have methods that we’ve found to work, and we’re proud of it. Our methods are best described below:
- Stay in Contact with your Wealth Management Advisor
- Achieve Goals that Are Reasonable
- Respect Your Wealth and Look to Preserve It
- Help People with Decisions about Their Wealth
(A) Always Stay in Contact with your Wealth Management Advisor
Our wealth management advisors will always be there for you. Money is not delicate, and our wealth management advisors know that. If you call, our wealth management advisors will be ready to help you.
(B) Always Achieve Goals that Are Reasonable
You have money, you want to protect it. That’s a very reasonable baseline. Our job is to make sure that the baseline is met - at the very minimum - and your investments prove lucrative. However, we do want to make sure you aren’t going to be surprised by a sudden loss. We’ll do our best to inform you of market discrepancies before they happen and when to invest to increase your wealth the most.
(C) Always Respect Your Wealth and Look to Preserve It
Like many other Americans, you probably didn’t get your money by a streak of good luck. What you’ve earned has come from hard work and many hours of labor. We understand what your money represents to you, and wish to protect it as best we can. Although the marketplace can be difficult to predict, we will take all the steps we can to make sure your wealth won’t be lost, even in the most minuscule of ways. That means we’ll invest both with risk and without risk: whatever the market calls for and using the wealth management tools and wealth management resources we’re familiar with
(D) Always Help People with Decisions about Their Wealth
Whether you have just begun saving or are in the middle of your retirement, you may not know exactly how to manage the nest egg you’ve established. Should you spend it? How frugal should you be? You aren’t alone: many others have the same questions. Our trained wealth management advisors can let you know what methods others have taken that have successfully provided for themselves and for their next of kin. We want to make sure your money doesn’t disappear before your eyes. Our wealth management firm has one goal: to make sure wealth doesn’t go to waste for anyone.
If you have a question about the money you earned, our wealth management advisors will be there, with the wealth management tools, wealth management resources and the wealth management advice you need. We look forward to being there for you.
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Risk Management
The “M.I.N.D.”© in the M.I.N.D.© Risk Management System is an acronym that stands for Multiplication Is Not Diversification. The M.I.N.D.© Risk Management System is a unique method of wealth management that emphasizes risk reduction.
Highlights: The M.I.N.D.© Risk Management System follows sound, time-tested investment principles that builds balanced and properly diversified portfolios of assets that are not highly correlated. Now there’s a way to measure ALL of the risk in your portfolio. It’s similar to your FICO credit score, the higher the score the lower the risk.
Analysis: The M.I.N.D.© Risk Management System will analyze your current investments to identify concentration risk violations, correlation imbalances and improper diversification.
M.I.N.D.© Portfolio Risk Score.
Measure all of the risk within your portfolio. Like your FICO credit score, the higher the score, the lower the risk. The M.I.N.D.© Risk Management System will determine your personal portfolio risk score and identify the level of risk within your portfolio. The System will illustrate how your current portfolio will behave in various market scenarios.
Action: In order to achieve financial freedom and accumulate true wealth, you’ll need an asset allocation policy. It’s important to work with a Financial Advisor who understands portfolio risk, asset allocation, correlation and how to properly diversify your portfolio. It’s also important to work with a Financial Advisor who recommends more than stocks and bonds alone. It’s important to have clearly defined goals and objectives. But writing the plan is only the first step. You have to put it into action in order to benefit.
3 Critical Mistakes
Critical Mistake #1: Concentration Risk
If you suffer from concentration risk, you have too much money invested in a single company, asset class or asset type. If you primarily own stock and bond mutual funds, you may be exposed to concentration risk and not even know it!
Critical Mistake #2: Improper Asset Correlation
One objective in wealth management is to create a balanced portfolio that works when the market is up and when the market is down. The best way to do that is by combining assets that respond differently to market conditions or have “low correlation” to one another.
Critical Mistake #3: Misguided Diversification
While it is true that asset allocation is essential to maximizing portfolio performance, few people truly have a properly diversified portfolio. That’s because some financial advisors, and many investors, think that asset allocation simply means owning a lot of different investments. It doesn’t.
Keep this in “M.I.N.D.”© - Multiplication Is Not Diversification!
Concentration Risk
If you suffer from concentration risk, you have too much money invested in a single company, asset class or type. Most financial planners talk about risk reduction and diversification but the fact is that their horizontal diversification approach does not significantly reduce portfolio risk. Horizontal diversification is adding asset classes to the same asset type, such as combining large cap stocks with small cap stocks. Vertical diversification is adding different asset types, such as adding bonds to a portfolio of stocks. Vertical diversification is better than horizontal, but most portfolios need broad-based vertical diversification. Additional asset types are needed to properly balance the portfolio.
Most financial planners talk about risk reduction and diversification, but the fact is they continue to offer only stocks and bonds. It’s important to focus primarily on managing risk while achieving acceptable returns.
The M.I.N.D.© Risk Management System takes a more diversified approach to manage wealth by following a common sense discipline that incorporates basic, sound, time tested principles. The M.I.N.D.© Risk Management System starts with a macro approach to diversify a portfolio into five asset types that are not highly correlated. No more than 35% should be allocated into any one asset type to avoid concentration risk. This proprietary approach will diversify your portfolio within each asset type which helps to reduce risk. The objective is to establish a properly diversified portfolio that is part of the overall wealth management solution.
Improper Asset Correlation
The objective in wealth management is to create a balanced portfolio that provides attractive returns — when the market is up and when the market is down. The best way to do that is by combining assets that respond differently to market conditions or have “low correlation” to one another.
Many financial planners believe that proper diversification is achieved by adding stocks and bonds of varying asset classes. The concept is that by adding small cap stocks to a portfolio of large cap stocks, the portfolio will be more stable. Small cap and large cap stocks may not be 100% positively correlated, but they are considered to be highly correlated, which means they often track up and down in price, step-for-step.
If adding more assets helps reduce risk and provides additional diversification, then adding assets that are not highly correlated can achieve another layer of diversification. The problem is that not too many people really understand how correlation works.
The trick is to select a combination of different asset types that are not highly correlated. Asset types are different than asset classes. Many financial planners build portfolios with different asset classes but they have neglected to diversify the most important component of a portfolio, the asset types. Is your portfolio properly diversified?
When building a house, most people get it right. They visualize what they want the house to look like and then develop a blueprint. From there they go shopping for the materials needed. Unfortunately, most investors build their portfolios totally backwards. They start the process by buying products rather than building a blueprint. It is like going grocery shopping without a list; wandering aimlessly down the grocery aisles buying a little insurance, some stocks, bonds and mutual funds. They end up buying a lot of what we call “asset clutter”.
The next time you are considering an investment, decide the purpose of the investment. If you need income, don’t buy a growth stock. Many people accumulate assets like they are trophies. This maze of assets is nothing more than a giant puzzle of confusion!
Misguided Diversification
While it is true that asset allocation is essential to maximizing risk reduction, few people truly have a properly diversified portfolio. That’s because some financial advisors, and many investors, think that asset allocation simply means owning a lot of different investments. It doesn’t. Keep this in…
“M.I.N.D.”© - Multiplication Is Not Diversification!
We define diversification as "to balance (as an investment portfolio) defensively by dividing portfolios among different asset types". Most financial professionals and investors diversify their porfolios by purchasing several stocks, mutual funds and perhaps a couple of bonds. This strategy fits the basic definition of diversification, but more needs to be done.
By adding more asset types, you begin to reduce risk at the portfolio level. Many financial planners diversify their client portfolios into stocks or mutual funds before understanding how these investments correlate to each other. Owning several different stocks or mutual funds is an example of horizontal diversification which reduces portfolio risk, but not substantially. Adding additional asset types that are not highly correlated is vital to accomplishing true portfolio diversification.
The M.I.N.D.© Risk Management System follows sound, time-tested investment principles that help build properly diversified portfolios with assets that are not highly correlated to each other. We have developed a macro risk measurement method for identifying risk within a portfolio. If you would like a free Portfolio Risk Score please contact us.
The Key Benefits Are:
Reduce Investment Risk:
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- Reduce investment risk by developing a well diversified portfolio that include investments that respond differently to the same market events. A portfolio should consist of multiple asset types that are not highly correlated. The allocation for each asset type should not violate concentration rules as defined by the M.I.N.D.© Risk Management System.
- Cash & Equivalents
- Debt Instruments
- Equities
- Real Estate
- Hard Assets/Commodities
- Energy/Oil & Gas Drilling
- Private Equity
- Other Investments
Enhance Portfolio Income:
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- Enhance portfolio income by selecting specialized investments that provide a cash flow component along with an inflation hedge. Having cash flow in a portfolio is important regardless of an investor's need for additional income.
Reduce Taxes:
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- Reduce taxes by taking advantage of specialized strategies developed for investors that are in a high tax bracket.
MIND© Risk Management, Securities, and Insurance products offered through D.H. Hill Securities, LLP Member FINRA/SIPC. Advisory services offered through D.H. Hill Advisors, Inc. 7821 FM 1960 East Suite B, Humble, TX 77346
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