Sys­tem­atic Re-Bal­anc­ing is 3 factor’s term for three sep­a­rate port­fo­lio tech­niques we employ, each based on solid aca­d­e­mic and indus­try research.

Whole Port­fo­lio Re-Bal­anc­ing: Allows for eval­u­a­tion of a client’s total port­fo­lio across all accounts, as opposed to look­ing at each account and re-bal­anc­ing accounts indi­vid­u­ally.  Especially when there are both taxable and tax-deferred accounts, this tech­nique can often min­i­mize trad­ing costs and defer or min­i­mize tax con­se­quences of re-bal­anc­ing.  It also allows for the best way of iden­ti­fy­ing which lots, and from which accounts should be sold to max­i­mize tax benefits.

Oppor­tunis­tic Re-Bal­anc­ing:  Is a method­ol­ogy of buying/selling an asset back towards to the appro­pri­ate allo­ca­tion level based on threshold levels rather than on a quarterly or annual basis.  Recent, cutting-edge academic research on portfolio re-balancing recommends establishing bands around major asset allocation positions and opportunistically re-balancing when positions deviate beyond the asset allocation bands.  The 3 factor Engine™ allows us to continuously review client portfolios and act on small deviations from the target asset allo­ca­tions- rather than waiting til quarter-end or year-end- which our research shows pro­vides enhanced return opportunities.

Opti­mal Asset Loca­tion: Is a disciplined approach of allo­cating investment positions across tax­able and non-taxable accounts according to the tax sen­si­tiv­ity of each asset.  For exam­ple high yield­ing assets are likely to be allo­cated to a non-taxable account, where appro­pri­ate to avoid any taxes from interest income.

By com­bin­ing Sys­tem­atic Re-Bal­anc­ing with Advanced Tax Engi­neer­ing and our Low Fees, we believe that we are able to pro­vide our clients with the best, real­is­tic after tax returns1.  Thanks to our invest­ment in our pro­pri­etary soft­ware com­bined with our stream­lined oper­a­tions, we are able to offer the high­est qual­ity advisory man­age­ment ser­vices at very low cost.  While there are other investment advisors who also offer­ low fees, we believe that we are unique in employ­ing the best invest­ment man­age­ment tech­niques (Sys­tem­atic Re-Bal­anc­ing, Advanced Tax Engi­neer­ing) while main­tain­ing a low fee structure.

Please click here to read a more detailed expla­na­tion of these techniques.

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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.