[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Firm Update[/x_custom_headline]
The end of May marked the firm’s first quarter operating as an Independent Registered Investment Advisory firm (RIA). It has been a busy few months coordinating registration, compliance and technology. That said, we are excited to now focus exclusively on our clients’ financial needs.
Our biggest announcement to date relates to my new partner (please see below). I would like to thank all those that have joined as clients in the first quarter as well as those those who we are engaged with as potential clients. We are well ahead of our projections in terms of clients and assets and plan to only add only a few more clients in 2015. This allows us to do what we do best, building custom portfolios and providing investment advice for individuals, families and institutional clients.
For those unfamiliar with the firm please see our mission statement on the firms home page. We will strive to keep this monthly newsletter short and concise.
[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Welcome Dave[/x_custom_headline]
CRA is pleased to announce Dave Falicia will be joining the firm as of 15 June. Dave comes to Copper River from a long tenure at Oppenheimer Funds, where he had managed a fixed income portfolio that exceeded $300 million dollars, and was head of the short-duration trading group. At one time, his group was responsible for approximately $40 Billion in assets.
Over his 23 years as a professional fund manager, at one of the largest asset management firms, he has witnessed the best and worst of the markets, and has demonstrated great stewardship of client assets through “Bull” as well as “Bear” markets.
Dave lives in Wash Park (Denver) with his family and is an avid golfer, fly fisherman as well as an experienced private pilot.
[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Market Commentary[/x_custom_headline]
The equity markets appear to be trading without any particular direction, as earnings, economic data, and global forces continue to provide mixed signals. Corporate Earnings, Employment Data, as well as Housing and GDP generally are pointing to a continued recovery, although there have been some disappointing data points which have added a pessimistic tint to the overall picture. It is pretty obvious that this does not look anything close to what we experienced in the 90s or even before the recession of 2008. With historically low interest rates, investors are chasing returns where they can find them, creating a situation where one must remain cognizant that some assets may be overvalued.
Our outlook in our client portfolios is that the markets will continue to be relatively flat as the Fed draws closer to raising rates, as levered investors will swing in and out of the market with every new bit of information. Even when the Fed does move, it will raise rates slowly and methodically, only moving as the economy can support the new interest rate levels. We do not foresee any steep or aggressive moves by the Fed over the next couple of years, as there are no mechanics in the US or Global economies to warrant such a steep rise in rates. This should to continue to make broad market investing a relatively prudent strategy over the long term.
[x_custom_headline type=”center” level=”h2″ looks_like=”h3″ accent=”true”]Product Commentary[/x_custom_headline]
At CRA we continue to focus on our utilization of ETF’s as the core product choice in our portfolios. Given their flexibility, low costs, liquidity, transparency, tax efficiency and ability for us to use one for nearly every index, sector, region and country it’s easy to understand why these funds have become the investment vehicle of choice for both retail and institutional investors alike. With over 1600 ETF’s to choose from, representing +3 Trillion in assets, it is quite the challenge for us to focus on the best ones to utilize. We currently have 50+ ETF’s that we have labeled as first tier and that are utilized in our client portfolio’s. We use an actively based screening criteria, set by the firm, to narrow down those funds we utilize. This criteria includes the following factors-Sponsor Strength (Blackrock, ProShares etc), Size of ETF or AUM, Bid/Ask Spread, Expense ( MER), Performance over 1,3,5 year basis and most importantly the forward outlook for the next 12 months. We are actively researching and monitoring another 200-300 ETF’s ( 2nd tier) in what is a constant daily evaluation cycle for the firm.
Recently, both Dave and I attended the ETF Masters class, sponsored by Bloomberg, and held at the Four Seasons in Denver. In early May, we attended an ETF conference put on by Northern Trust ( FlexShares). We continue to meet with fund sponsors and managers on a weekly basis evaluating products and discussing various markets.
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