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Doing Our Due Diligence

Jacob Jaegle, CFP®
July 18, 2019

Do you ever wonder how we decide what investment options will provide the best opportunities for our clients? We are often approached with requests to investigate new investments – either from the fund companies we work with currently or new ones. In addition, we are always proactively seeking additional solutions or better replacements for existing investments.

Regardless of how an investment opportunity comes to our attention, we follow a defined process that includes quantitative and qualitative assessments to help identify which investments or securities will be the most successful and the best fit within your portfolio’s allocation.  We are able to leverage extensive research capabilities, both internally and through Raymond James, to gain additional insights into potential new investment options.

Keeping a Watchful Eye

Our “Buy List” is comprised of approximately 65 mutual funds/exchange traded funds. We have a substantial review process for these current holdings to ensure that once an investment is on our list, it deserves to stay there.

Here is our review process that evaluates an investment’s ongoing merit:

  • We individually review all of our holdings on a weekly basis.
  • Our Investment Committee reviews all of our recommended holdings on a monthly basis, as well as reviewing current economical market conditions and other factors that can affect merit.
  • We research market commentary using both Raymond James resources and research investment sources, such as Morningstar®.
  • We meet regularly with fund representatives.  Depending on the investment, we meet with the appropriate representative anywhere from three or four times a year.
  • If the investments we recommend behave differently relative to their objective, undergo change in management, or severely underperform their peers, we will:

              - add it to the watch list;

              - add it to the closed/review list; or,

              - depending on severity of differences, we may move directly to the “fired” list.

  • We issue letters to our clients to keep them apprised of our efforts and research

If a fund requires additional due diligence, we talk with our fund representatives to gain more clarity on why the fund is no longer meeting its objectives. These discussions can also include the Product Specialist or Portfolio Manager who we meet with to discuss the philosophy, process, and performance of the fund.  We have greater access to Portfolio Managers and specialists than many firms due to of the size of our company and our excellent reputation.  Because these individuals work for the investment or manage it directly, they can provide additional details and a more complete picture of the investment.

In some instances, we may gain insights to add the fund back to our Buy List.  In other cases, the information further drives our decision to monitor the investment more closely or to fire it outright.

You can be sure that you are receiving convicted advice because at M.J. Smith & Associates, we “eat our own cooking…”, meaning that we manage our personal portfolios using the same products and strategies that we utilize for our clients!

Our Experience = Your Confidence

Why are we a reputable source to review funds?  In addition to our ongoing commitment to learning and education, our team at M.J. Smith and Associates is proud to have earned the following credentials:

Chartered Financial Analyst (CFA):

   Drew Harper, CFP®, CFA, Senior Financial Consultant

The CFA is the highest distinction in the investment management profession. The charter gives a strong understanding of advanced investment analysis and real-world portfolio management skills. The CFA Program is a self-study program divided into three levels of exams.

Certified Investment Management Analyst (CIMA®):

   Mark Smith, CFP®, CPA/PFS, CIMA®, President, MJSA, Branch Manager, RJFS

CIMA® certification is the peak international, technical portfolio construction program for investment consultants, analysts, financial advisors, and wealth management professionals.  CIMA® certification stands out among other financial certifications for its effective emphasis on the combination of theory and practical application.  In the most recent Value of CIMA® Certification research study, CIMA®-certified advisors reported increased confidence, competence, and compensation compared to other financial advisors.

CERTIFIED FINANCIAL PLANNER™ (CFP®):

   Mark Smith, CFP®, CPA/PFS, CIMA®, President, MJSA, Branch Manager, RJFS
   Drew Harper, CFP®, CFA, Senior Financial Consultant
   Jake Jaegle, CFP®, Senior Financial Consultant
   Alexa Kane, CFP®, CDFA, Financial Consultant
   Drew Barnes, CFP®, Financial Consultant

Although many professionals may call themselves “financial planners,” CFP® professionals represent the gold standard.  Individuals who have earned the CFP® have completed extensive training and experience requirements and are held to strict ethical standards.  They understand the complexities of the changing financial climate and know how to make recommendations in your best interest.

We want you to feel confident that when an investment is a part of our holdings and available to you to add to your portfolio, we have thoroughly researched it prior to inclusion and then continue to monitor it for any changes.

If you have any questions about positions in your portfolio, please ask your advisor now or during your next review.  

We look forward to the opportunity to sit down with you and review your personal investment plan.

Thank you for your feedback!
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CFP® | Certified Financial Planner™ - Certified Financial Planner Board of Standards, Inc., owns the certification marks above, which it awards to individuals who successfully complete initial and ongoing certification requirements.

This information does not purport to be a complete description of the developments referred to in this material. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.

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