How We Invest

INVESTING AT BTG: OUR PHILOSOPHY

Simply put - At BTG we believe the goal of a portfolio manager should be to capture the returns that the market provides.

All too often we come across investors with portfolios that are overly diversified, inefficient, and not customized to that individual's needs.

After nearly a decade of managing investment portfolios and seeing first-hand how different firms and institutions manage wealth, we've developed an investment model that is specifically designed for the retiree, and one that works.

What We Buy:

Equities: Low-cost, broad-based ETFs and stock mutual funds.

Fixed Income: Bond mutual funds, CDs, individual Treasuries, and money markets.

What We Don't Buy:

Equities: Individual stocks.

Fixed Income: Emerging market debt, absolute return funds, individual high yield bonds.

Other: Annuities, commodities, illiquid REITS, alternative investments.

Asset Class Emphasis:

We have a strong bias for US equities over international equities.
We tend to overweight large cap stocks and underweight small cap stocks.
We focus on investment-grade bonds and limit our exposure to high yield bonds.
We buy CDs and Treasuries to lock-in interest rates and income, and construct ladders in coordination with our clients’ distribution needs.

BTG's Bucket Strategy

The Concept: Our clients are primarily retirees, and we help them recreate a paycheck from their assets to support their retirement. Because our clients are in distribution it’s critical that we construct their portfolios that are:

1. Customized to their spending needs.

2. Prepared to protect against market corrections and recessions.

3. Structured in a way that promotes future growth to support a long retirement.

The Strategy: We view the Investment Portfolio in terms of three separate Buckets. Each Bucket has its own specific purpose, time horizon, and investment selection.

Bucket 1: Provides a consistent monthly paycheck for the spending needs.

*Investment Used: CDs, Treasuries, Money Markets, cash.

Bucket 2: Generates income to replenish Bucket 1, and creates an additional layer of protection.

*Investment Used: Bond mutual funds.

Bucket 3: Promotes long-term growth that is required to maintain the client's wealth and defend against future inflation.

*Investments Used: Equities.

Client Example

Clients: Larry and Susan Collins

Ages: 67 and 65

Portfolio Value = $1,000,000

Investment Allocation: 60/40

Annual Withdrawal Needs = $50,000 (5%)

BUCKET 2: Bond Funds (20% of Portfolio)

Bond Interest replenishes Bucket 1

* START HERE *

BUCKET 1 : Risk-Free Assets (20% of Portfolio)

Bucket 1 Investment Structure:

$50k - Money Market Fund

$50k - 1 YR CD

$50k - 2 YR CD

$50k - 3 YR CD

BUCKET 3: Equities (60% of Portfolio)

Stock Dividends and Profits from
Rebalancing replenish both Buckets 1 and 2

Context: Based upon the Collins' needs of $50k/year from their portfolio, we will structure it so there is at least four years of spending needs in risk-free assets in Bucket 1 at all times. This is where the monthly "paycheck" comes from. Bucket 2 will provide consistent income to help replenish a portion of the distributions, and will give additional protection to help offset stock market volatility. Lastly, Bucket 3 represents the equities that we hold for the long-term, which enable the portfolio to grow. The profits from rebalancing, along with the dividends, also replenish Buckets 1 and 2, all while still maintaining the 60% stock level.

INVESTING AT BTG: OUR PHILOSOPHY

What We Buy:

Equities: Low-cost, broad-based ETFs and stock mutual funds.

Fixed Income: Bond mutual funds, CDs, individual Treasuries, and money markets.

What We Don't Buy:

Equities: Individual stocks.

Fixed Income: Emerging market debt, absolute return funds, individual high yield bonds.

Other: Annuities, commodities, illiquid REITS, alternative investments.

Asset Class Emphasis:

We have a strong bias for US equities over international equities.

We tend to overweight large cap stocks and underweight small cap stocks.

We focus on investment-grade bonds and limit our exposure to high yield bonds.

We buy CDs and Treasuries to lock-in interest rates and income, and construct ladders in coordination with our clients’ distribution needs.

BTG's Bucket Strategy

Client Example

BUCKET 2: Bond Funds (20% of Portfolio)

Bond Interest replenishes Bucket 1

* START HERE *

BUCKET 1 : Risk-Free Assets (20% of Portfolio)

Bucket 1 Investment Structure:

$50k - Money Market Fund

$50k - 1 YR CD

$50k - 2 YR CD

$50k - 3 YR CD

BUCKET 3: Equities (60% of Portfolio)

Stock Dividends and Profits from
Rebalancing replenish both Buckets 1 and 2

Disclosure: This is a Hypothetical Client example. Every BTG client portfolio is customized. Do not consider this financial advice.

CONTACT

OFFICE LOCATION

MAILING ADDRESS

INVESTING AT BTG: OUR PHILOSOPHY

What We Buy: Equities: Low-cost, broad-based ETFs and stock mutual funds.

Fixed Income: Bond mutual funds, CDs, individual Treasuries, and money markets.

What We Don't Buy: Equities: Individual stocks. Fixed Income: Emerging market debt, absolute return funds, individual high yield bonds. Other: Annuities, commodities, illiquid REITS, alternative investments. Asset Class Emphasis:

We have a strong bias for US equities over international equities.

We tend to overweight large cap stocks and underweight small cap stocks.

We focus on investment-grade bonds and limit our exposure to high yield bonds.

We buy CDs and Treasuries to lock-in interest rates and income, and construct ladders in coordination with our clients’ distribution needs.

BTG's Bucket Strategy

Client Example

BUCKET 2: Bond Funds (20% of Portfolio)

Bond Interest replenishes Bucket 1

* START HERE *

BUCKET 1 : Risk-Free Assets (20% of Portfolio)

Bucket 1 Investment Structure:

$50k - Money Market Fund

​

$50k - 1 YR CD

​

$50k - 2 YR CD

​

$50k - 3 YR CD

BUCKET 3: Equities (60% of Portfolio)

Stock Dividends and Profits from Rebalancing replenish both Buckets 1 and 2

Disclosure: This is a Hypothetical Client example. Every BTG client portfolio is customized. Do not consider this financial advice.

CONTACT

OFFICE LOCATION

MAILING ADDRESS

What We Buy:

Equities: Low-cost, broad-based ETFs and stock mutual funds.

What We Don't Buy:

Equities: Individual stocks.

Fixed Income: Emerging market debt, absolute return funds, individual high yield bonds.

Other: Annuities, commodities, illiquid REITS, alternative investments.

Asset Class Emphasis:

Stock Dividends and Profits from
Rebalancing replenish both Buckets 1 and 2