What We Believe:

We believe that our best interest is your best interest, and that the only way to assure that our interests and yours are aligned and never in conflict is for our fees to be based on the value of our time or the amount of money we manage on your behalf, but NEVER on which investments you chose to make.

We NEVER accept any commission from any party for recommending any investment or product to you when we act as your investment advisor. We believe that it is impossible to be objective about your needs and to be totally "on your side" if we receive compensation from anyone other than you for our services. Only then can we earn your full faith and trust which is our most important asset.

Who We Are:

We are a team of seasoned investment professionals with decades of experience managing our own money as well as that of others:

• Richard Shaw
• Nathaniel Brinn, CFA
• Adam Cloud, LLB
  
  

Richard Shaw leads our team as President of QVM Group. Richard has extensive investment industry experience including serving on the board of directors of two large investment management companies, including Aberdeen Asset Management (listed London Stock Exchange) and as a charter investor and director of Lending Tree (download short professional profile). He provides portfolio design and management services to individual and corporate clients. He also edits our investment blog. His writings are generally republished by SeekingAlpha and Reuters and are linked to site such as Kiplinger and Yahoo Finance and other sites. He is a 1970 graduate of Dartmouth College.

Nathaniel Brinn has an MBA from Duke and is a Chartered Financial Analyst. He has extensive private placement, venture capital and merger-acquisition experience, including positions as President of venture capital firm Phoenix Strategic Capital Corporation, Senior Vice President of HSB Group (acquisitions and divestitures), and Executive Vice President of Webster Bank (acquisitions) and President of HSA Bank (operations). Nat focuses primarily on private equity, new ventures, mergers and acquisitions in our practice.

Adam Cloud is a 1996 graduate of Howard University Law School with an extensive municipal bond experience through prior work with Advest (Hartford) and Loop Capital (Chicago). Adam specializes in risk and cash management consulting, as well as advisory work related to municipal bond and infrastructure finance transactions.

 

 

 

What We Do:

We offer a wide scope of services consistent with the experience and skills of our associates, including:

• "Personal Investment Advice" for individuals and corporations

• "Impersonal Investment Advice" in the form of newsletters and proprietary research reports

• (buy side) Municipal bond refinancing bid management

• (sell side) Offering memorandum preparation for venture capital and real estate development

• (buy side) Evaluation of target companies for acquisition

• (buy side) Custom research on questions or topics of concern to client requesting the work

What We Won't Do:

We will not sell any investment or receive any form of compensation based on what "personal investment advice" clients decide to by, or that we decide to buy on behalf of clients who give us discretionary authority. We consider that to be a conflict of interest. We are a fee-basis only advisor.

We will not represent both sides of a merger, acquisition or venture funding or real estate funding transaction. We will clearly state whether we represent the sell side or the buy side in any private transaction.

We will not accept full discretionary investment accounts (ones for which the client is not engaged in formulating and approving a strategy and methodology).

We will not advise on accounts intended for speculation or accounts not managed according to a well formulated strategy and approach.

We will not do anything that is outside of our strict ethical and code of conduct guidelines or outside of our authority as registered investment advisors.

How Do We Charge for Services:

We charge an hourly rate for our time or a percentage of assets assets managed when providing personal investment advice, and we charge a per subscription or per report fee for online purchasers of "impersonal" investment advice. We do not charge our personal advice clients for any subscription or report content we provide to them in the context of personal investment advice.

Our hourly services are available on a flat fee basis and on an hourly basis depending on the assignment. Our minium retainer is for 12 hours.

Our asset management fees range from 1% to 1/2% depending on the size of the account, subject to an annual minimum fee of $10,000..

Our municipal refinancing fees are subject to IRS limits on "bond bid manager" assignments.

We do not charge for travel time when visiting a client at their location within 30 minutes one-way of our offices, but charge for travel time over 30 minutes. We do not charge for office supplies and expenses, unless clients request delivery of paper documents by post or courier. We normally deliver paper documents at face-to-face meetings or deliver electronic versions as PDF files by email attachment.

We do custom research for clients based on an agreed to work plan and budget, including travel and related costs (if any) and other out-of-pocket expenses that may be involved. Our custom research can be available on a fixed project cost basis or a time and expense basis. Our minimum custom research project is 20 hours.

Minimum Account Qualifications:

We do not set any account size minimums. but as a practical matter, portfolio management for accounts under $1 million would result in uneconomic expense ratios.

Scope Of Investments Utilized:

We advise clients predominantly through no-load mutual funds, exchange traded funds (ETFs), listed closed-end funds (CEFs) and exchange traded notes (ETNs). but do include individual stock or bonds when requested or when investment fund choices don't fill the need. Generally, funds provide necessary or desirable diversification..

Separation of Powers:

We do not assume custody of client assets, nor accept full discretionary powers over client assets. Clients may take three different paths to control. They may utilize our advice and make their own decisions and trade executions. That work can only be done on an hourly basis. Clients may provide us with limited power of attorney and rely on us to make trade executions. We do not do active trading for our clients. We practice asset allocation and periodic rebalancing with a long-term view. Trade execution is a minor part of our overall process. Clients may require that they approve each trade in the account before execution, or they may authorize us to make trades on the frequency and according to the strategy and limits set out in our periodic review meetings.

Regulatory Filings:

We are registered as an investment advisor with the State of Connecticut. We are required by law to enter into a written contract ("Contract for Personal Investment Advice") before we can render personal investment advice for a fee. You will receive a copy of that contract and a copy of our Part 2 - Form ADV prior to executing the contract. After contract execution the contract provides for a "free look" period during which fees will be refunded if you terminate the contract..

For our "impersonal investment advice" services (newsletters and research reports), which we sell via the internet, we are also required to execute a "click through" contract in which the purchaser clicks acceptance of the terms of our "Contract for Impersonal Investment Advice" which is presented for review prior to access the pay by credit card page.

We are required by law to collect and to maintain information about each client which regulators periodically examine to assure our compliance. That information includes information such as your name, address, phone and email, data of birth, income, net worth and other relevant information. We provide you with a complete copy of that information for your records and in response to regulatory requirements.

 

Effective portfolio management pursues investment return with controlled risk, taking into consideration investor goals, resources, obligations and limits.

Investing is a constant trade-off between return and risk. Asset class choices and mixtures are the fundamental keys to that trade-off. Individual security selection makes only a secondary contribution to results.

Studies show that roughly 90% of returns are determined by the asset allocation decision, and only about 10% by security selection and market timing. That’s why we spend most of our time working on asset class choices and class allocation weights for our clients.

Risk Control Is Critical: Uncontrolled high risk investment behavior is the domain of youth who have the time and opportunity to learn from mistakes, to use future earnings to replace losses and to try again. Managed risk behavior is the domain of mature investors dealing with much larger amounts and who do not have the time, opportunity and future earnings to replace lost assets.

Risk control is possibly the most important part of a long-term wealth building or wealth conserving program. Losses are difficult to recoup.

Expense Control: Most investors utilize funds to one degree or the other. Some use only funds. Selecting funds with low expense ratios can make a significant contribution to overall results over time. Expense ratio differences may not seem important in strong market years, but in the long run fund expense ratios are an important factor in total return.

Quantitative Element of the Approach: Modern portfolio management practice combines quantitative techniques enhanced by computers and governed by common sense, judgment, fundamental information, and investment wisdom. The computer modeling approach relies significantly on Monte Carlo simulation and mean variance optimization. Monte Carlo simulation runs thousands of scenarios to explore the range of possible outcomes. Mean variance optimization finds the best allocation of multiple asset classes in a portfolio for any target return or risk level. The process is based on three key criteria: (1) mean return, (2) variation of return, (3) correlation of return between the asset classes.

Qualitative Element of the Approach: Computers alone can’t pull the wagon and historical data cannot be relied upon without human interpretation within the current and expected future context. Human judgment about expected returns, variance and correlation is a necessary component to portfolio design and management.

Reversion to the Mean: Also at the heart of asset allocation is the principle of “reversion to the mean” -- that is to say that returns for each asset class tend to revolve around some average. Above average returns tend to move down to the historical average over time, and below average returns over time tend to move up to the historical average. Mean reversion is one of the most powerful forces at work in markets. Like gravity which inevitably pulls us back to earth, mean reversion pulls returns toward long-term averages.

Rebalancing - Harvesting and Reinvesting: As the asset class returns in the portfolio vary, periodic rebalancing harvests profits from those assets with relative strength and reinvests in those assets with relative weakness. This is a value orientation and is mildly contrarian in approach, because it involves scaling out of popular asset classes as they rise and scaling into comparatively unpopular assets as they decline. Rebalancing honors the time proven principle of “sell high and buy low”, unlike those who chase yesterday’s hot investments who are buying high hoping to sell even higher. Buying low and selling high as a method has a lower risk of loss than buying high and selling higher.

Rebalancing - Risk Management: Different asset class have different levels of risk (volatility). As the asset class weights in a portfolio change due to differences in return, the composite risk (volatility) of the portfolio changes. Since the portfolio was designed to fall within a certain risk as well as return range, rebalancing is a way to restore the risk expectations as well as the return expectations of the portfolio.

Emotional Element of the Approach: Asset allocation is not compatible with speculation, tip-sheets or chasing momentum -- all of which appeal to the human desire for short-term results. Speculation requires continual back-to-back short-term wins which are elusive. Unlike speculation, asset allocation can seem boring, because it is like being the hare in the rabbit and hare race fable -- the hare wins in the end.

With asset allocation, the portfolio will never be the highest rate of return in any given year, but will be a solid relative performer. However, over the long-term, the well allocated and rebalanced portfolio will be among the highest cumulative return investment approaches.

It takes guts to stick with asset allocation in the face of seemingly great short term opportunities or temporary market setbacks.

Creating wealth through a series of short-term investments is more difficult and more risky than taking a long-term approach through asset allocation and rebalancing.

Any and all investment approaches have good periods and poor periods of performance. It is human nature to abandon whatever approach is being used in the face of declining fortunes to seek another way. However, history has shown that asset allocation is the best approach. To make asset allocation work, the investor must stick with it and not enter, exit and re-enter the process, based on short-term ups and downs.

Institutional Approach: Asset allocation is the method used by the largest pension and endowment funds in the world, yet its tenets lean against the wind of crowd opinion and behavior. That is an emotionally difficult posture to maintain in the face of the noise and excitement or depression of media headlines and chatter among associates.

Advisor Role: Your investment advisor must help you understand your overall needs and risk limits, design an appropriate portfolio and provide continuing guidance or management for that portfolio, but also lend you strength to stay on your chosen path when conviction falters in the face of short-term conditions, headlines and media talking heads..

Contact Us: We would like to show you how our asset allocation services can help you.