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Our Investment Philosophy

At Niehaus Financial Services, each client’s circumstances are unique. Therefore, the guidance we provide is specific to each client’s situation. Still, our underlying investment philosophy influences our approach with all clients. The general principles that we use to determine our investment recommendations are listed below.

We advocate:

Goal-Oriented, Purposeful Asset Allocation Decisions

  • Consider time horizon, risk tolerance, and necessary rate of return
  • Follow research-based models as a guide (see Litman Gregory information below)
  • When applicable, sell what is in favor to generate income

Diversifying Your Investments

  • Own bonds and fixed investments (savings & CDs, or similar) designed for short-term safety and stability
  • Own stocks for long-term growth potential
  • Use alternative investments when appropriate relative to core investment vehicles

Professional Investment Management

  • Prefer long-tenured, successful money managers, with an understandable approach
  • Limit individual stock exposure
  • Measure investment performance over multi-year periods

Flexibility in Your Investment Plan

  • Establish an emergency fund for unanticipated needs
  • Make conservative assumptions about inflation, rate of return, income need, and savings rate
  • Allow for changes to investments that help minimize tax costs and investment expenses

Our Primary Source for Investment Research: Litman Gregory Analytics

Litman Gregory was established in 1987 as an investment management business, and now consists of four separate businesses, with each driven by the firm’s primary commitment to original, exceptionally thorough and creative investment research. Niehaus Financial Services, LLC, began subscribing to Litman Gregory’s AdvisorIntelligence service in mid-2008.

The asset allocation (mix of stocks, bonds, and alternative investments) we recommend for clients is based in part on Litman Gregory’s investment research. They assess a variety of asset classes, which influences how much weight to give particular positions within a portfolio. Before this fine-tuning, we often start with strategic allocations as a framework for clients’ investments. These are outlined below.

Disclosures:

Certain material in this work is proprietary to and copyrighted by Litman Gregory Analytics and is used by Niehaus Financial Services, LLC, with permission. Reproduction or distribution of this material is prohibited and all rights are reserved.

Investments in model strategies may expose the investor to risks inherent within the model and the specific risks of the underlying investment directly proportionate to their allocation. All investments involve the risk of potential investment losses.

A Defensive investment model is suitable for highly conservative investors, including those nearing or in retirement or requiring withdrawals of some of their invested assets within a three-to-five-year time frame. This portfolio will have up to 80% of the assets invested in fixed income and no more than 20% of the assets invested in equity.

A Conservative investment model is suitable for conservative investors, including those nearing or in retirement or requiring withdrawals of some of their invested assets within a three-to-five-year time frame. This portfolio will have up to 60% of the assets invested in fixed income and no more than 40% of the assets invested in equity.

A Balanced investment model is suitable for investors uncomfortable with an aggressive all equity strategy who nevertheless require a greater return to pursue their specific investment goals. This portfolio will have up to 60% of its assets invested in equity and up to 40% of its assets invested in fixed income.

An Equity-Tilted investment model is suitable for investors with longer time horizons who are willing to assume above-average short-term volatility in pursuit of long-term growth. The portfolio will have up to 75% of its assets invested in equities and up to 25% of its assets invested in fixed income.
An Equity investment model is suitable for long-term investors willing to accept greater risk in pursuit of growth potential. This portfolio will have up to 100% of its assets invested in equity.

Investment-Grade Bonds include U.S. traded investment grade bonds, Treasury securities, Government agency bonds, Mortgage-backed bonds, and a small amount of foreign bonds traded in the U.S. Municipal bonds and Treasury Inflation-Protected Securities are excluded.

Domestic Larger-Cap Stocks includes the top publicly traded American companies, which represents all industries of the U.S. economy.

Domestic Smaller-Cap Stocks includes the smallest companies with a weighted average market capitalization of approximately $1 billion. Stocks trading below $1.00, as well as pink sheet and bulletin board stocks are excluded.

Developed Markets include stocks of Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom.

Emerging Markets including stocks of Brazil, Chile, China, Columbia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

Diversification seeks to reduce the volatility of a portfolio by investing in a variety of asset classes. Neither asset allocation nor diversification guarantee against market loss or greater or more consistent returns. Past performance is no guarantee of future results.

Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise. The price of equity securities may rise, or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries, or the securities market as a whole, such as changes in economic or political conditions. Equity securities are subject to “stock market risk” meaning that stock prices in general may decline over short or extended periods of time. Alternative investments provide investors with exposure to markets and investment strategies that cannot be accessed through traditional fixed income and equity markets (such as real estate, commodity or natural resources). Investing in these investments is speculative, not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investments.

Securities offered through Securities America, Inc., Member FINRA/SIPC and advisory services offered through Securities America Advisors, Inc. Niehaus Financial Services, LLC, the Securities America Companies, and Litman Gregory are unaffiliated.