FAQFrequently Asked Questions. | |
There are 19 entries in the FAQ.
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Questions:
Why is your way of investing better than others? I want an 'edge' on the markets. Can you give me one? How do you Adapt to Changing Markets®? Can't a mutual fund provide management like this? Won't the market bounce back if I just hold onto my investments? How can I avoid downturns that have hurt me in the past? Which of your strategies would be best for me? Does your style of investing generate a lot of taxes? Can you manage tax deferred annuities? I have a lot of bonds (bond funds). Can you manage bonds? How do I change strategies or withdraw money after I sign up? How do you get paid? How much are your fees? Does the trading generate a lot of fees? Will I be able to see my account values on line? I have heard that no one can time the market. Is that what you try to do? What kind of reporting will I receive? How do I get started? Your fee might be more than I want to pay.| Questions and Answers | |
| Why is your way of investing better than others? | |
 | When the markets cycle down as they inevitably do, our investments are systematically moved to the relative safety of a money market fund or to stronger investments. Ordinary buy-and-hold strategies subject you to full market risk. At Hepburn Capital Management, LLC, our clients get the comfort of knowing that we quickly Adapt to Changing Markets®, greatly reducing the market risk that you face. |
| I want an 'edge' on the markets. Can you give me one? | |
| Yes. We will move your money into investments that are going up and out of investments that are going down. By doing this over and over we give you a distinct edge over buy-and-hold investing and a greater chance of getting the results you want. |
| How do you Adapt to Changing Markets®? | |
| We download several hundred prices a night into our Adaptive Strategies software that analyzes pricing trends and tells us what is really happening in the markets. We don't have to analyze the Wall Street Journal or understand each expert on the financial news.
We eliminate all of the "noise" and react only to the numbers to decide what to buy, sell or hold. This software (written by our founder, Will Hepburn) is the basis of all of our systems and our “trade secret”. No other firm, anywhere, has it. |
| Can't a mutual fund provide management like this? | |
| Not really. Most mutual funds stay 95% invested through good markets and bad. (source: Morningstar Principia Pro). In fact the prospectuses of most mutual funds require them to stay heavily invested all the time. Most funds are prohibited from moving to cash no matter how bad the markets become. At HCM we recognize that there is a time to be invested and a time to be out of the marekts. Hepburn Capital's ability to move our clients to the relative safety of a money market fund in times of market turmoil is a hard to find service that makes us very different from everyday mutual-fund-type management. |
| Won't the market bounce back if I just hold onto my investments? | |
| Market Indexes always have bounced back, but often it can take years or decades. It took 16 years for the Dow Jones Industrial Average to recover it's losses and break even in the 1966-1982 period. Will you be willing to wait that long? Can you afford to?
Many investors in the Nasdaq index took such great losses during 2000-2002 that they will never recover. Avoiding large losses is the key to more consistent long term compounding of account values. |
| How can I avoid downturns that have hurt me in the past? | |
| Even if you are on the right track, you can get hit by a train if you just sit there. Most investors, convinced they are on the right track with the right investments, are brainwashed by Wall Street's propaganda machine to do nothing in the face of market declines. Keeping your money in a declining investment may be in the best interest of the financial institution, but can be very costly to you.
Hepburn Capital Management, LLC has developed several strategies that can systematically move your money “off the tracks” during market declines. This greatly reduces the chances that you will ever suffer declines as great as buy-and-hold investing delivers. For an article about this, see Don’t Get Railroaded by Wall Street. |
| Which of your strategies would be best for me? | |
| Take our quick Risk Tolerance Quiz on this site and it will indicate a general direction for you. We also consider the tax treatment of your investments, and often recommend our less active strategies in taxable accounts. An appropriate mix of strategies personalized to your financial situation will be recommended for each client after a discussion with one of our investment advisory representatives. |
| Does your style of investing generate a lot of taxes? | |
| Of course in IRAs and other tax sheltered accounts, this won’t be an issue. In taxable accounts, however, gains will generally be taxable in the year they are earned and taxed at ordinary rates. The greatest financial gains come from avoiding risk, followed by generating consistent returns. Tax issues are a consideration, but not the most important factor in financial success. At HCM our management priorities are to: (1) avoid risk, (2) generate investment gains, and (3) look at tax considerations. If your primary goal is to make money we think you’ll find that this approach makes sense. |
| Can you manage tax deferred annuities? | |
| Yes. We can run some of our strategies in certain variable annuities. If you have existing annuities that you are not happy with they can often be transferred into annuities that will allow us to manage them. We only use no load annuities with no lengthy exit fees. |
| I have a lot of bonds (bond funds). Can you manage bonds? | |
| Yes. Our Bond Protection Program uses "hedging" techniques to substantially cushion the principal value of a bond portfolio in times of rising interest rates. You continue to collect interest while we protect your principal value for you. |
| How do I change strategies or withdraw money after I sign up? | |
| You are free to change things or withdraw money at any time. It is simple and easy. Just ask. We put no “golden handcuffs” on your accounts. There are no exit fees of any kind, whether you want to withdraw a little or a lot from your accounts. |
| How do you get paid? | |
| We are a fee-only firm. We take no commissions, and charge a simple flat fee based on the amount of assets under management, the strategies involved, and other circumstances. Our fees range from 1/2% of the amount managed per year up to a maximum for 2.5% per year. Larger accounts, including groupings of family or friends, get volume discounts. Non-profits may qualify for pro bono management. |
| How much are your fees? | |
| HCM fees are on a sliding scale from 1/2% per year for large accounts or less active strategies, to 2.5% per year for our smaller or more active accounts. Larger accounts, including groupings of family or friends, get volume discounts. When you call we can give you a firm quote. We occasionally have had prospective clients tell us they feel that our fees seem high, and we understand that there are investment advisors who do charge less. Our intensive style of active daily management of your accounts is more expensive than passive investing, but if our service results in avoiding only part of the losses in one big market decline it may save you many years worth of fees. |
| Does the trading generate a lot of fees? | |
| No. We use only no load investments, and most of our trades have no transaction fees, either. Our account-size fee structure aligns our interests with yours. The only way we can make more money is to make sure your account values are growing, because that is what our compensation is based on.
When we move you to a new investment, you will have the comfort of knowing the reason we made that move was we thought that it was the best place for your money, not that we get paid per move like commissioned brokers might. |
| Will I be able to see my account values on line? | |
| As soon as your account is funded, you can request convenient on-line access to see current holdings, transaction histories, performance figures and more through our web site. |
| I have heard that no one can time the market. Is that what you try to do? | |
| No. Market timers try to pick the exact tops and bottoms of a market which is very hard to do. We simply apply systems that move you out of investments in decline and into investments that are stronger. By doing this over and over, we can give you a significant edge over ordinary buy-and-hold investing. |
| What kind of reporting will I receive? | |
| We provide reporting so you can follow our work as closely or as casually as you wish to. The custodian provides confirmation of each transaction on a daily basis. Monthly or quarterly the custodian also sends account statements showing current values and a history of the recent activity. Quarterly, we will provide a performance summary. Internet account access is also available through our web site and provides several levels of reporting. |
| How do I get started? | |
| Its as easy as 1-2-3 1. Call us. (800) 778-4610. There is no money required to get started. 2. We will gather some basic information regarding your financial situation and needs, and schedule a meeting with an advisor. (Meetings can be done over the telephone.) Your account will be set up the way you want, and we will mail the documents for your signature. 3. When accounts have been funded, HCM then gets your accounts in sync with our world class investment strategies. |
| Your fee might be more than I want to pay. | |
| Certainly, there are other firms who manage money for lower fees. However, our intensive management style which prepares us to defend your principal values on short notice is a relatively unique combination of benefits that is hard to find, especially at cheaper companies. When it comes to the financial security of you and your family do you really want to restrict yourself to considering only the lowest bidder? |
