Investment Philosophy

 

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At Koch Financial Partners, we believe that low-cost, no-load mutual funds are the best tools for reducing expenses and providing diversification. We recommend both actively managed and index funds. We can evaluate your portfolio’s existing investments and recommend whether to keep your existing asset allocation or make changes. If you don’t have an asset allocation strategy, we can create one for you.

Asset allocation is probably the most important factor in your investing success.  Numerous studies have shown that asset allocation is the biggest determiner of your overall investment return. Before we can work on an asset allocation strategy, we need to determine your risk tolerance, your investment goals, and your investment timeline. These key factors will help determine the right mix of investments for you.

Risk capacity.  Risk capacity refers to the ability you have to withstand losses. If you have already saved substantial amounts and are close to retirement, you don’t need to take as much risk as someone who is just starting to save and has a long investment horizon. We will evaluate both your risk tolerance and risk capacity to help guide your investment decisions.

Middle aged manInvestment costs.  A key factor in your investing success is your ability to keep your investment costs low. Extra costs that appear to be small add up over time to eat away at your return, especially in smaller accounts. Index funds and low-cost actively managed mutual funds are important tools to keep your investment costs low. Often fees are hard to uncover, hard to understand, and even harder to compare between investment choices. We will help you understand the total fees associated with each investment, including the fees you pay us.  Understanding your total fees will help you make more informed investment choices.

A note about risk. All investments have some risks. All investments can lose value during certain cycles of the market. You should carefully read each investment prospectus and gather information before deciding whether an investment is right for you.