NWIC ranked #7 for AUM in Oregon

Northwest Investment Counselors is pleased to share that we are #7 on the list of Oregon’s top Registered Investment Advisory firms as ranked by assets under management by Investment News.* “We are pleased to have made Investment News’ list,” said Mark Scarlett, Principal and Co-founder of Northwest. “I want to thank our clients for the trust they have placed in us and the hard work and dedication of our employees. As a result, we have grown by over $150 million in the last 10 years, ” he added.

Founded in 1998, Northwest now manages over $300 million for families and foundations, primarily in individual stocks and fixed income securities. Our financial guidance can be summed up by three key attributes that make Northwest’s wealth management distinct and valuable. We put our clients’ needs first rather than products or quotas. Our wealth management team draws upon a wide breadth of experience, education, and credentials to develop portfolios that fit the unique needs of our clients. And the in-house and rigorous nature of our investment process, which has produced tax-efficient investment results with below average volatility, is directed by a team of portfolio managers, all of whom have earned the Chartered Financial Analyst (CFA) designation.**

*Methodology: Investment News qualified over 1,600 firms headquartered in the United States based on data reported on Form ADV to the Securities and Exchange Commission as of May 1, 2015. To qualify, firms must have met the following criteria: (1) latest ADV filing date is either on or after January 1, 2015, (2) total AUM is at least $100M, (3) does not have employees who are registered representatives of a broker-dealer, (4) provided investment advisory services to clients during its most recently completed fiscal year, (5) no more than 50% of amount of regulatory assets under management is attributable to pooled investment vehicles (other than investment companies), (6) no more than 25% of amount of regulatory assets under management is attributable to pension and profit-sharing plans (but not the plan participants), (7) no more than 25% of amount of regulatory assets under management is attributable to corporations or other businesses, (8) does not receive commissions, (9) provides financial planning services, (10) is not actively engaged in business as a broker-dealer (registered or unregistered), (11) is not actively engaged in business as a registered representative of a broker-dealer, (12) has neither a related person who is a broker-dealer/municipal securities dealer/government securities broker or dealer (registered or unregistered) nor one who is an insurance company or agency.

**To learn more about the CFA charter, visit CFA Institute.

NWIC Announces AUM Exceeds $300 Million & Celebrates 18 Years in Business

We founded Northwest eighteen years ago to provide personalized, institutional quality investment management to AUMfamilies.  Because of the trust clients have placed in us and the hard work and dedication of our employees to our clients, we have grown by over $160 million in the last ten years to over $300 million in assets under management (AUM).  We continue to look forward to prudently serving the investment needs of our clients so they can live well and retire better.

Thank you clients, employees, and partners for making Northwest a success.

 

Stock markets around the world have sold off and volatility has spiked

While you should receive our detailed year end newsletter soon, we wanted to quickly reach out to you to provide our thoughts and action plan.

First off, up until last summer US stock markets have been rather subdued with no correction (more than 10% down) in a few years. Even the dramatic decline in the price of oil which began mid 2014 had been orderly up to late last year.

WHAT’S CHANGED THEN?

China is probably the best explanation with the strong Dollar a contributor too. We have written about both of these before as well as covering the drop in oil in one of our quarterly economic updates at the beginning of 2015. We said you should expect the price of oil to stay low for a while, and that consumers would benefit and eventually spend some of the windfall.

We would boil this market correction down to changing expectations for corporate earnings this year. We don’t see a recession in the US or anything approaching 2008-2009. So take comfort from that. The US only exports something like $120 billion in goods directly to China. Also, interest rates are not increasing to any degree such that this would change how investors capitalize earnings or pose competition for investor dollars. Inflation, too, is still on hiatus. The drop in the price of oil is far from being a negative for our economy. The drop in gasoline prices alone added $134 billion to consumers’ pockets (more than total exports to China) in 2015 versus 2014. So, no recession here unless you live in oil country.

Even without a US recession global companies are exposed to slowing conditions abroad. For example, around half of the sales of companies in the S&P 500 index are from international markets. So Investors are concerned that corporate earnings will not measure up to what was expected in 2016 with the world economy slowing. They’re probably right. With the Dollar up, US firms can become less competitive and earnings abroad translated back into Dollars will be lower than expected just last year. And as we wrote in our year end newsletter, stocks are expensive and probably priced for perfection.

NOW FOR THE GOOD NEWS.

Take a close look at the chart below of S&P 500 profits per share since 1960 and the S&P 500 index value. (The red line shows earnings, and the blue line represents price.) Through war, recession, whatever, never before has the S&P 500 price and earnings failed to find a bottom and recover. This time will be no different–be patient.

Sp500WHAT ARE WE DOING?

The sell off has made some of the companies we own buys again. Many have been holds to use Wall Street jargon. And we have been able to add a couple new names in the industrial sector that we think are high quality and now good values –MSC Industrial Direct in the Smaller Companies portfolio and Rockwell Automation in Equity Income. We are looking for more. You can read more about those additions in our year end newsletter. Most of you, too, have a large portion of your portfolio in bonds. Bonds are up over this period of volatility as investors seek safety.  That’s the benefit of diversification.

So again, please be patient but don’t hesitate to call or come in if you have questions, concerns, or your circumstances have changed that may impact your tolerance for risk in your portfolio. 

The securities mentioned are not the only securities we have purchased in the last year for our clients. If you would like a list of all securities purchased in the last year, please contact us. Additionally, it should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities mentioned.

Northwest Makes Top 25 Portland Business Journal Money Management List

Northwest Investment Counselors is pleased to share that we have been named one of the Portland Business Journal’s top 25 money management firms for its 2015 Wealth Management and Financial Services Guide publication.*  “We are pleased to have been honored by the Portland Business Journal,” said Mark Scarlett, Principal and Co-founder of Northwest.  “I want to thank our clients for the trust they have placed in us and the hard work and dedication of our employees.  As a result, we have grown by over $150 million in the last 10 years, ” he added.

Founded in 1998, Northwest manages over $260 million for families and foundations, primarily in individual stocks and fixed income securities.  Our financial guidance can be summed up by three key attributes that make Northwest’s wealth management distinct and valuable. We put our clients’ needs first rather than products or quotas. Our wealth management team draws upon a wide breadth of experience, education, and credentials to develop portfolios that fit the unique needs of our clients. And the in-house and rigorous nature of our investment process, which has produced tax-efficient investment results with below average volatility, is directed by a team of portfolio managers, all of whom have earned the Chartered Financial Analyst (CFA) designation.**

 

* The list was created by totaling the assets under management for Oregon and Clark County, Washington clients as of the second quarter of 2015. See Portland Business Journal.

**To learn more about the CFA charter, visit CFA Institute.

 

Retire.Ready: Spotlight on the Bond Ladder

Clients near or in their retirement years consistently express three primary financial concerns:

  1. Do I have enough money?
  2. Is my cash flow predictable?
  3. What if I have an emergency?

Our Retire.Ready solution addresses these concerns. We believe those nearing retirement should transition from a pure total-return approach to a hybrid total-return and liability matching strategy to reduce risk while managing retirement cash flow. The Retire.Ready solution consists of three important components:

  1. In-depth financial assessment that creates a retirement budget
  2. Social Security optimization
  3. Portfolio divided into three financial buckets including unique 10-year bond ladder to match future cash flow needs (see diagram)

Just like our long-standing, traditionalbuckets portfolios Retire.Ready utilizes high-quality bonds. Uncovering attractive yields is always an important goal, but safety and predictability are the cornerstones of the Retire.Ready bond ladder. It takes a prudent investor to know when to pass up the siren call of even slightly more yield in favor of capital preservation. This is a tradeoff we take to the next level.

Our traditional total return portfolios that incorporate our intermediate fixed income securities are designed to be extremely safe, but also maintain a manageable amount of risk, to increase income responsibly. In our intermediate fixed income composite, we have the flexibility to target an array of credit ratings across either a range of maturities or a more consolidated timeline, as long as we feel comfortable with the overall diversification, yield, and safety. Our in-house research points us towards companies with wide economic moats and strong balance sheets, but also towards companies whose competitive advantage is based more on economies of scale in competitive, low barrier industries. We prefer companies with strong management teams and high cash flow generation, but our research allows us the flexibility to favor unusual credit metrics over others, such as a company’s ability to tap the credit markets, cut large historic dividend payments, or divest less profitable business lines. Our internal, rigorous, and evolving due diligence is our advantage in finding individual bonds that we feel confident will mature at par, all while providing higher than general market yields to maturity.

Retire.Ready takes a slightly different approach. The typical bond portfolio risks, be it interest rate risk, reinvestment risk, or headline risk have been reduced by a bond ladder designed to match our clients’ upcoming liabilities. The bonds in the ladder won’t always be the highest yielding bonds in a particular credit sector, due to our prioritizing of safety, and will in most cases be held to maturity. Though we plan to hold bonds to maturity, this is not a “set it and forget it” portfolio or high priced annuity. We continue to monitor the portfolio, be it corporate or municipal bonds, to ensure the persistent high standard of credit quality we recognized when the bonds were purchased. Retire.Ready bonds will benefit from institutional pricing and also the nimble nature of our bond desk to find mispriced “odd-lot” bonds when appropriate. The Retire.Ready portfolio will make use of corporate, agency, and municipal bonds to find the right mix of credit quality, tax-efficiency, and income. Please contact us to learn more about what goes into the Retire.Ready portfolio and how it may help you to be and feel more secure financially.

We Made the Grade!

We made the 2014 Portland Business Journal list of Fastest-Growing Private Companies.  Thank you clients and partners for the trust you have placed in Northwest to manage your wealth.  Thank you employees for the hard, and smart, work that made this possible.  PDX bus journalWe look forward to continued growth and moving up the list.

Mark Your Calendars for These Upcoming Northwest Events

We have some great, fun events scheduled for the summer and hope you can join us at one of these.  Please contact your Wealth Manager at Northwest if you want to attend one or you want more information.  We kick off summer with the Lake Oswego Sounds of Summer Concert (7-9pm) on Wednesday, July 23rd at Foothills Park on the Willamette (weather forecast sunny and warm).  We will be a sponsor and have a limited number of choice seats for Paperback Writer (a Beatles tribute band).  Who doesn’t want to re-live the 1960’s? Click the link for more info:

http://www.ci.oswego.or.us/parksrec/sounds-summer-concerts

paperbackwriter

Next we will be a sponsor of the Lake Oswego Moonlight & Music Sunday, August 10th at Millennium Park (6-7:30 pm).  We will be a sponsor of the Aaron Meyer concert (seeing a rock violinist should be on everyone’s bucket list).  Click below for more details or contact us:

http://www.ci.oswego.or.us/parksrec/aaron-meyer-august-10-2014

ameyerfull

We hope you can join us for one of these fun, informal events.  Please contact your Northwest Wealth Manager soon as space is limited.