Based on our research, we’ve found that a significant number of actively managed funds promising to “beat the market” rarely ever do. While regularly failing to meet their stated goals, these funds continue to charge high fees, some greater than 1% per year.

At Wealthstone, we utilize low cost, in-house direct indexing strategies and index funds, which are investments that seek to replicate the returns of a particular benchmark index, such as the S&P500. The key difference between direct indexing and index funds, is in tax-loss harvesting capabilities. Tax-loss harvesting is a process in which we take advantage of market fluctuations to optimize your portfolio to be as tax-efficient as possible, thereby increasing your after-tax returns. This is a unique advantage when compared to mutual funds and ETFs. Research in this field points to a Tax-Alpha of about 1% or more with effective tax-management. Tax-Alpha is the excess increase in a portfolio’s value compared to its benchmark as a result of effective tax-management.

We integrate alternative investments into our strategies, recognizing their potential to enhance returns and income. These investments, spanning diverse asset classes and strategies, play a crucial role in broadening portfolio diversification and reducing correlation with traditional markets. Our focus includes private equity, venture capital, private credit, hedge funds, and real assets, each offering unique benefits such as higher return potential, alternative income sources, tax-efficiency, and inflation protection. Embracing these alternative strategies, we aim to help our clients achieve their long-term investment goals, complementing traditional stock and bond allocations with innovative, versatile tools for building a robust portfolio. Through our partnership with Charles Schwab and industry relationships, our clients are provided with access to an industry-leading alternative investments platform. We conduct significant due diligence with any alternative investment strategies we recommend, and we dedicate time with each client to educate them on the risks, liquidity, and costs for alternative investment strategies.

Tax-efficient investing will be a high-priority component of your strategy. We understand that minimizing tax liability is key to maximizing your investment growth. We employ innovative strategies tailored to your unique financial situation, focusing on optimizing after-tax returns. By leveraging tactics such as efficient asset allocation, tax-loss harvesting, and thoughtful selection of tax-advantaged investment vehicles, we strive to enhance the efficiency and performance of your portfolio. This focus on tax efficiency plays a vital role in preserving more of your wealth, ensuring it works harder for you and aligns seamlessly with your long-term financial aspirations.

The detrimental effects of high-cost investment strategies on your long-term financial objectives are profound and often irreversible. We place a significant emphasis on cost-effective investment strategies. By minimizing expenses, a larger portion of your funds remain actively invested, fostering growth and compounding over time. This approach is pivotal in enhancing the likelihood of achieving greater financial success and realizing your long-term goals.