Portfolio Management
The Tax Practice, Inc. is a fee-based, investment management advisory firm. Our management philosophy is driven by client investment objectives. We strive to balance objectives taking into consideration:
- Investor age
- Income and tax bracket
- Net worth
- Portfolio size
- Account type (taxable/tax deferred/tax exempt)
- Investment timeline
- Risk sensitivity
If a client’s requirements do not “close” (for example, a limited income retired client pursuing aggressive investment goals), we will recommend goal reassessment to protect our client’s interests.
Our investment principles embody sound diversification, discipline, and after-tax performance. Through client interview and ongoing communications, we establish and maintain an investment plan commensurate with each client’s risk profile.
We strive to achieve client income needs (Conservative to Moderate risk tolerance) and minimize risk to principal via Certificates of Deposit holdings, government and investment grade corporate fixed-income securities (bonds) and preferred stocks. In limited instances, mutual fund high-yield fixed income securities are acquired to supplement portfolio income. This risk profile may include stock market exposure to mitigate inflation-driven purchasing power loss. Stock market holdings are normally limited to defensive dividend paying securities in the telecommunications, tobacco, oil and pharmaceutical industries.
Client portfolios propelled by income and long-term-moderate growth profile (Balanced and Growth risk tolerance) generally consist of small, medium and large cap value-oriented equity and equity-income mutual funds – along with individual stock and bond holdings in large capitalized companies. Fixed income mutual funds are employed for income, diversification, and to mitigate market volatility.
Long-term-aggressive growth plans (Aggressive risk tolerance) drive a more volatile portfolio generally consisting of small, medium and large cap growth and aggressive growth mutual funds. Portfolios may hold individual aggressive stock holdings. If client insists upon a highly non-diversified portfolio (i.e. large ex/employer position), the client profile is considered to be very aggressive. Fixed income mutual funds may also be employed to dilute account volatility.
Our firm is partnered with Fidelity Investments Institutional Wealth Services to harness access to capital markets, and the operational excellence of one of the industry's strongest brokerage platforms. The Securities Investor Protection Corporation (SIPC) protects securities in accounts held by Fidelity Investments. SIPC insurance does not protect against loss from declines in market value.
Clients may track investment activity on-line or with an easy-to-read, informative client statement. It shows snapshots, summaries and detailed histories. Trade confirmations and security tax reports are available in electronic or hard copy format.
Account performance is integrated with tax mitigation and provisioning services for clients electing to couple their tax and portfolio management needs.
