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About Us

Mission Statement

Our mission is to help clients reach their dreams by providing holistic and personalized financial advice including financial planning, tax and estate planning, philanthropy planning, portfolio construction and portfolio management, in a way that optimizes return and risk and helps the client have peace of mind regarding finances.

Core Values

  • Integrity - We believe that our reputation is more valuable than our bottom line.  Success is important, but integrity is essential.  We are committed to succeeding the right way, without ever cutting corners or putting our interests ahead of our clients.  Integrity means doing the right thing every time.
  • Trustworthiness - To earn trust, we not only must act with integrity, we must also be excellent at everything we do, and limit our activities to those in which we can attain excellence.  We strive to earn our clients' trust every day.
  • Transparency - We believe clients should understand what they are paying and how their portfolio is invested.  We do not receive any compensation except for what is directly paid by the client, and we set up our fee structure in a straightforward, understandable way.  We have no hidden fees, and are paid for our management of assets, not for selling products.  We have no incentive to use any products other than because they are in the best interest of our clients.
  • Rationality - Investing should be about a rational assessment of risk and reward.  We seek to implement processes that protect ourselves and our clients from making emotional decisions and to focus on the objective merits of an investment.
  • Humility - Overconfidence has been the downfall of many very intelligent people.  We remind ourselves that in investing there is no sure thing, and everyone is susceptible to error.  We realize there is always room for improvement and seek to continually hone our craft.
  • Curiosity - One key to long-term investment success is continuous learning.  We seek to understand how things work, and to continually strengthen and expand our circle of competence.
  • Service - We exist for the benefit of our clients, and not the other way around.  We strive to provide world-class service and to always meet or exceed client expectations.

Investment Philosophy

Investing starts with the client, not with the investments.  Investing is not done in a vacuum, and should reflect the objectives of the investor. Clients differ in resources, needs, goals and temperament.  An investment plan should be tailored to the needs of the individual to accomplish client objectives without excessive risk. 

Asset allocation involves choosing which broad categories of investments to hold in a portfolio, and at what weight each should be held, and is the most important investment decision.  Each class of investment has its own advantages and disadvantages.  A well-diversified portfolio protects against different types of risk (e.g. inflation, interest rates, economic) while dampening overall portfolio volatility.  Diversification is not necessarily achieved by holding many investments, but rather by investing in several asset classes that are not highly correlated to each other.  Rebalancing a diversified portfolio from time to time enhances returns by reallocating from investments that have outperformed to those which have underperformed, capitalizing on long-term mean reversion of returns. 

Within an asset class, mutual funds and exchange traded funds offer good diversification of individual securities, but at a cost.  Investors should pay close attention to fees and turnover, which are highly predictable.  Fund returns are not very predictable, as past performance, especially in the short-term, is not very predictive of future results.  We strive to pick individual stocks in areas where we can provide greater efficiency or effectiveness than available funds, and to pick low cost funds in every other area.

Security selection (choosing individual stocks, bonds, etc.) should be done with a rational, thoughtful approach.  For every buyer, there must be a seller, so we need a rationale for why we have an edge in selecting any given security versus those selling it.  We seek investments that are selling for below what we deem to be the fair value.  These may not be glamorous or popular, but our purpose for making an investment is capital appreciation, not popularity.  We are cognizant of volatility and liquidity, but our long-term focus allows us to accept higher volatility and less liquidity than investors myopically focused on daily or monthly performance.  We believe our long-term view and willingness to analyze out of favor securities gives us an edge.

Value investing - attempting to purchase securities for less than their intrinsic value - is an effective security selection strategy.  Due to the propensity of people to be overly optimistic when things are going well and overly pessimistic when problems are prevalent, and to assume that current conditions will continue for a very long time, stocks often trade above or below their fair value.  We seek to own underappreciated securities with a margin of safety at a discount to our assessment of their true value.  We are not looking for the "next big thing".  Our view is supported by many studies across various markets which show persistent outperformance of stocks priced inexpensively against their fundamental metrics versus those carrying higher prices.

Investment Process

We believe it is important to understand the goals and means for attaining those goals in order to formulate a plan.  New clients begin with the new client questionnaire to help us understand their current situation, their goals and objectives, and their risk tolerance.  We see this as similar to a medical history questionnaire for a new patient for a physician.  The information obtained from this questionnaire will be helpful to get to know the client and to collaboratively develop an investment plan.  An initial consultation will further help to understand the clients' objectives and to develop a customized plan. 

Once the client's situation is well understood, an investment plan will be developed for the client's consideration.  This could include a saving or liquidity plan.  It will always involve a strategic asset allocation.  The strategic asset allocation is the long-term portfolio mix designed to best meet the client's needs.  It should be considered the expected average allocation over time.  It should be reviewed periodically, and any time there has been a change of situation such as a marriage, divorce, retirement, job change or windfall.  These reviews are part of our ongoing relationship with our clients and are collaboratively done with clients.

The next step is to make tactical adjustments to the strategic allocation.  These adjustments are defensive or opportunistic and are responses to current market conditions.  Exposure to asset classes with very high valuations currently may be adjusted downward to reduce risk.  The purpose of tactical adjustments is not to make bold market predictions, but to be responsive to the current opportunity set, without losing sight of the long-term strategy.

Implementation is the next step of the process. We will purchase the funds or securities to gain exposure to the allocation in the plan.  We seek to minimize fees and to optimize taxes by selecting low cost, low turnover funds, and through low turnover in the strategies we manage in-house.

The final steps of the process are monitoring, reporting and re-evaluation.  Account values are available in real-time (through direct online access to the third party broker/custodian); statements are generated by the broker/custodian, and we provide periodic newsletters with commentary.  From time to time, and no less than annually, we like to meet with the client to re-assess goals and objectives and to discuss any changes to the strategic or tactical allocation.

We provide fee-based, discretionary management.  We do not sell products.  We welcome phone calls or emails inquiring as to our rationale on individual investment decisions.  We want clients to be well-informed and comfortable with their portfolios.  We will not make changes to the strategic asset class allocation without first discussing those changes with the client and getting agreement.

For those clients wanting only to invest in specific strategies rather than holistic wealth management, the first three steps above do not apply.

Distinctives

Rothman Investment Management does not claim to be unique, but we do strive to be different.  The firm is intentionally structured to provide superior performance and excellent service to clients with a patient, long-term view.  We view the following as our distinctives:

  • Fee-only - We believe a management fee is the most fair way to be paid by our clients, eliminating any potential conflict of interest.  Charging a fee based on assets managed allows us to be compensated the same for existing clients and new clients, rather than receiving a large up front commission and a small ongoing trailer, which incentivizes sales over management.
  • Asset-management focus over asset gathering - We have a passion for investing and measure our success in how well we do with what is entrusted to us rather than how much business we can bring in.  Our own money is invested alongside our clients.
  • Fiduciary - as a Registered Investment Advisory firm we are held to the high standard of a fiduciary.  We are required to put the client's interest above our own.  We work for the client rather than simply selling to the client.
  • Long-term focus - In our investing we seek excellent performance over an entire business cycle rather than chasing short-term results.  In our business we seek to develop a client base we can grow with.  We want long-term relationships, not transactions.
  • Value orientation - we seek to receive more value than we pay for an investment, and to provide our clients with more value than they pay for our services.
  • Concentrated client base - we are committed to keeping our base of clients small so each client can receive excellent service.
  • Holistic service - with experience and training in financial planning, asset allocation, security selection and tax planning we seek to provide a multi-faceted service to best achieve client objectives.

Asset Custody

We do not take custody of client assets. Unless other arrangements are made, clients will open an account with TD Ameritrade, which will hold the assets, execute trades and produce statements. Interactive Brokers may also be used upon mutual agreement between the client and the firm. Using a third-party custodian is a best practice for advisors for the protection of clients.

For more information on TD Ameritrade, or to log in to your account, go to www.advisorclient.com.

Interactive Brokers LLC is a registered Broker-Dealer, Futures Commission Merchant and Forex Dealer Member, regulated by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and is a member of the Financial Industry Regulatory Authority (FINRA) and several other self-regulatory organizations. Interactive Brokers does not endorse or recommend any introducing brokers, third-party financial advisors or hedge funds, including Rothman Investment Management, LLC. Interactive Brokers provides execution and clearing services to customers. None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Interactive Brokers makes no representation, and assumes no liability to the accuracy or completeness of the information provided on this website.

For more information regarding Interactive Brokers, please visit www.interactivebrokers.com.