Asset Management

Ideal conditions for achieving investment success are created by the disciplined application of three major strategies of modern prudent fiduciary investing: broad diversification of risk, low management costs, and legal tax avoidance/deferral:

1. It is 5th Street Advisors' strongly-held belief that the most important factor in successful long-term investing is asset allocation; we advocate an active rather than a passive approach to asset allocation.  In plain English, this means your portfolio will be rebalanced approximately twice yearly in order to maintain the long-term asset allocation originally specified.  Rebalancing typically occurs when a particular asset class becomes either over-weighted or under-weighted with respect to other asset classes, and is generally relatively tax neutral.
    
2. All other things being equal, it is an objective fact that the higher the fees paid for investment management, the lower the net investment yield.  Since costs are among the few controllable variables in a portfolio's returns, 5th Street Advisors builds portfolios with low cost indexed-based exchange-traded funds (ETFs) or index funds.  Moreover, its asset management fees are generally a fraction of what mutual fund companies and other money managers charge. 
    
3. Taxation produces by definition a direct reduction of portfolio return. Portfolios should use tax efficient instruments and be structured to avoid or defer taxation as much as possible.  ETFs and index funds are among the best instruments in the marketplace for achieving this goal. 

5th Street Advisors Has No Conflicts of Interest

Many asset management firms have one or more conflicts of interest which can actually place the firm in conflict with its clients.  Examples of this problem include:

1. The fund manager is beholden to the fund company's stockholders, and must by definition put their interests ahead of all others.  An independent, fee-only Registered Investment Advisor (RIA) like 5th Street Advisors has no such conflicts.
    
2. Figures and charts purporting to show how individual managers have beaten specific benchmarks are often self-serving, period specific, and do not take into account the effects of taxation.  Moreover, the very small percentage of money managers who outperform their benchmarks is not a static group; while it is possible to identify outperforming managers with the benefit of hindsight, it is enormously difficult to identify them in advance.
    
3. Since the vast majority of asset managers don't beat the indices, why pay high fees for sub-par performance?

Planning

5th Street Advisors espouses a wealth-creation philosophy unique in the financial services industry.  It is our fundamental belief that a coordinated, integrated, verifiable and performance-based total-return oriented approach to wealth management and creation can only be achieved by employing a broad array of disciplines.

In the past, financial advisors associated with banks, brokerage houses and insurance companies generally only offered product lines and financial solutions specific to those legacy industries.  In other words, bankers primarily utilized banking vehicles, securities brokers used stocks and bonds, and insurance professionals tended to look for solutions to clients' needs in insurance products.

The de facto repeal of the Glass-Steagall Act in the 1990's greatly altered the financial landscape in favor of consumers.   In today's deregulated environment, an independent non-industry aligned provider like 5th Street Advisors is free to recommend the most tax-advantaged and tax-efficient products and vehicles from any of the traditional platforms of banking, brokerage and insurance.  In 5th Street's view, this comprehensive, interdisciplinary approach represents a superior way of maximizing wealth creation, wealth protection and total return over time for our clientele.

Among the tools used to achieve our clients' goals are:

• Tax-efficient investment vehicles and financial strategies
• Risk management techniques
• Use of counter-intuitive thought-processes
• Dispelling commonly-held, but often incorrect, notions about money
• Use of a non-linear methodology to maximize savings
• Best-in-class products
• Strategic alliances with professional advisors such as accountants, attorneys, and lending institutions.