CompleteMarkets
At Fleming Financial Services, Inc., our role is to assist our clients in defining and realizing their financial objectives and goals. We work with our clients to implement personalized plans designed for their unique situations. Our areas of concentration are: Retirement planning, Estate and Wealth Transfer strategies, and Business Continuation planning. We emphasize the importance of conducting our business with integrity and professionalism. As a member of PartnersFinancial, an independent national financial services company, we are able to provide access to sophisticated resources for the benefit of our clients. Some of the professionals with our firm are currently registered to conduct business through NFP Securities, Inc. With those additional resources in place, we help facilitate the complex corporate and personal financial decisions our clients must make.
Active vs. Passive Portfolio Management-Part 2
Fleming Financial Services, PA, Active vs. Passive Portfolio ManagementPassive investing: focusing on costs Advocates of unmanaged, passive investing--sometimes referred to as indexing--have long argued that the best way to capture overall market returns is to use low-cost market-tracking index investments. This approach is based on the concept of the efficient market, which states that because all investors have access to all the necessary information about a company and its securities, it's difficult if not impossible to gain an advantage over any other investor. As new information becomes available, market prices adjust in response to reflect a security's true value. That market efficiency, proponents say, means that reducing investment costs is the key to improving net returns. Indexing does create certain cost efficiencies.  Because the investment simply reflects an index, no research is required for securities selection. Also, because trading is relatively infrequent--passively managed portfolios typically buy or sell securities only when the index itself changes--trading costs often are lower. Also, infrequent trading typically generates fewer capital gains distributions, which means relative tax efficiency. Note:  Before investing in either an active or passive fund, carefully consider the investment objectives, risks, charges, and expenses, which can be found in the prospectus available from the fund. Read it carefully before investing. And remember that indexing--investing in a security based on a certain index--is not the same thing as investing directly in an index, which cannot be done. Blending approaches with asset allocation The core/satellite approach represents one way to employ both approaches. It is essentially an asset allocation model that seeks to resolve the debate about indexing versus active portfolio management.  Instead of following one investment approach or the other, the core/satellite approach blends the two. The bulk, or "core," of your investment dollars are kept in cost-efficient passive investments designed to capture market returns by tracking a specific benchmark. The balance of the portfolio is then invested in a series of "satellite" investments, in many cases actively managed, which typically have the potential to boost returns and lower overall portfolio risk. Caution:  Bear in mind that no investment strategy can assure a profit or protect against losses. ©2013 Broadridge Investor Communication Solutions, Inc. All rights reserved.