3 factor asset View - My Portfolio

AssetView™ is 3 factor Advantage’s™ web-based port­fo­lio visu­al­iza­tion tool. It was designed to help clients:

• Stay focused on their ulti­mate goals
• View their hold­ings exactly as we do…holistically
• View their cus­tom asset allocation

3 factor‘s AssetView™ was designed to help our clients stay focused on their ulti­mate goals and not focus on short term gains and losses. Of course we all love win­ners and deplore losers. But as pas­sive investors, we under­stand that mar­kets ebb and flow. Your losers and win­ners may make you depressed or ecsta­tic but dis­ci­plined pas­sive investors know that suc­cess requires a long time hori­zon. The only sen­si­ble path is to per­se­vere with a diver­si­fied asset allo­ca­tion through thick and thin. There is sim­ply no other intel­lec­tu­ally hon­est path.
AssetView lets clients view their hold­ings exactly as we do…holistically. 3 factor believes a major flaw with the invest­ment indus­try is while their reports pro­vide vol­umes of infor­ma­tion; they present the wrong data, as they focus atten­tion toward gains and losses. The day-to-day con­cern of an investor should be – but rarely is – whether their asset allo­ca­tion is ‘correct’ – that is that their hold­ings across all their accounts con­form to their per­son­al­ized asset allocation.

You and your fam­ily are one entity and should (nor­mally) have a sin­gle, holis­tic allo­ca­tion. You want to view your entire hold­ings within the con­text of your asset allo­ca­tion, whether your cur­rent hold­ings — across all of your accounts — match your desired asset allo­ca­tion. But you have many accounts, some of which your advi­sor man­ages as well as accounts you man­age your­self or other advi­sors man­age. What about those ‘out­side’ accounts? Again – sadly — the indus­try falls fall far short of this require­ment. Rarely if ever do such reports present an over-all asset allo­ca­tion view. This is a key attribute of AssetView.

Summary

AssetView lets you drill down to see the hold­ings for each asset class; across all accounts. An asset class can have any num­ber of funds, ETFs or even indi­vid­ual secu­ri­ties mapped to it. Typ­i­cally there is a pre­ferred fund for pur­chases in tax­able accounts and a dif­fer­ent one (if appro­pri­ate) for non-taxable ones. In The client’s pre-existing ‘legacy’ hold­ings and even their out­side hold­ings (those not man­aged by 3 factor) are mapped to asset classes.

Securities

 

In order to max­i­mize returns — by min­i­miz­ing tax con­se­quences of trades – the 3 factor Engine™ keeps track of the cost basis of each tax­able hold­ing. Such painstak­ing account­ing is essential for tax sen­si­tive rebal­anc­ing and loss har­vest­ing. It allows the engine to opti­mize returns: taxes are min­i­mized by cap­tur­ing losses prior to accept­ing any cap­i­tal gains.

Lots

Each client has her own, fully cus­tom asset allo­ca­tion devel­oped for her particular finan­cial sit­u­a­tion, risk tol­er­ance and goals. In the exam­ple screen shots, note that the client’s allo­ca­tion con­sists of a split between equi­ties and fixed income. Within equi­ties there are spe­cific ‘top level’ classes: US, Devel­oped, and Emerg­ing as well as REITs. Each of these ‘top level’ classes are fur­ther divided into sub-classes. The exam­ple shows US hold­ings as Large Cap, Small-Value and Large Cap Value.

In addi­tion, the client’s secu­rity pref­er­ences are shown. Note the map­ping of funds (or ETFs, or indi­vid­ual equi­ties) to asset classes, includ­ing pref­er­ences for tax­able and non-taxable accounts. In addi­tion, each asset class has a tax effi­ciency level (1…4) which is what dri­ves opti­mal asset loca­tion pro­cess­ing. A num­ber of addi­tional para­me­ters are used to fur­ther cus­tomize the 3 factor Engine™: min­i­mum trade size, min­i­mal allow­able loss, etc.

Better Returns Through Research

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3 factor Investing 101

Indexing

Evidence Based Investing

The Case for Indexing

A Short History of Index Investing

ETF’s vs Mutual Funds

Do excellent companies make good stocks?

Portfolio Construction

Asset Allocation

Expert’s Allocations

Where do I start?

The Real Work

Portfolio Re-Balancing

Investment techniques That Add Value

Other Topics

Monte Carlo Simulation

Wealth Management


(1) Analy­sis com­par­ing after tax per­for­mance of other advi­sors (or a self-managed, sophis­ti­cated investor) to 3 factor based on a glob­ally diver­si­fied port­fo­lio with a 60% equity, 40% fixed income allo­ca­tion. Ini­tial port­fo­lio val­ues assume the fol­low­ing: (a) $750k tax­able and $250k IRA with yearly addi­tions of $20k to tax­able account and $5k to IRA. (b)Taxes deducted via shares each April, assum­ing the high­est tax bracket for a Cal­i­for­nia investor. 

Past per­for­mance is not a pre­dic­tor of future performance.

3 factor has con­ducted exten­sive analy­sis con­cern­ing port­fo­lio per­for­mance. See “impor­tant dis­clo­sure” for details and dis­claimers regard­ing our state­ments con­cern­ing per­for­mance, and the var­i­ous assump­tions we have made in our analy­sis.