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500 Capitol Mall, Suite 2350

Sacramento, CA 95814
1.916.405.9140 | Email Us

Investment Strategy

“Stocks always go down faster than they go up, but they always go up more than they go down.”
– David Gardner

At Towerpoint Wealth, we do not believe market timing and beating the market works over the long haul. We are humble about our ability to accurately predict the future, and do not speculate. We do not have a binary “all in” or “all out” philosophy. We do not believe that there is ever a time to fully and completely get either in or out of the stock market. Recognizing that investment decisions do need to be made in part based on future expectations, we also recognize that our veritable crystal ball is never completely transparent.

Our Core Investment Principles:

Broad Diversification

Broad Diversification Investment Strategy

Tactical Portfolio Adjustments
Tactical Portfolio Adjustments Investment Strategy

Strategic Asset Allocation

Cost-ConsciousCost Conscious Investment Strategy

Disciplined Portfolio Rebalancing

Disciplined Portfolio Rebalancing Investment Strategy

Tax Sensitive
Tax Sensitive Investment Strategy Process

The centerpiece of our investment strategy focuses on developing a foundational strategic asset allocation and properly constructing a diversified portfolio specifically tailored to your unique needs and goals. We will take you through different investment scenarios with different risk settings to assist and guide you in making sound investment decisions. Most of our investment/portfolio-specific recommendations are centered on low-cost index and low-cost institutional mutual funds, individual investment-grade bonds, and various exchange-traded funds, or ETFs. While sensitive to its movements, we will not rashly react to the daily, weekly, and monthly gyrations of the stock market, and instead accept that these gyrations can and will occur.

We will be disciplined in working alongside you in helping you maintain focus on your unique and customized plan and strategy, channeling our energy towards what we can control (risk, taxes, expenses), and not what we cannot (politics, markets, economic changes).

Our Core Investment Principles:

Broad Diversification

  • The most fundamental principle to our investment process is diversification. Having a diversified portfolio, one holding many different kinds of assets, has been proven throughout financial history to increase the probably of higher long-term portfolio returns, while at the same time reducing the risk of the portfolio. Diversification is truly the only “free lunch” in investing.

Strategic Asset Allocation

  • A foundation of our investment strategy is the development and implementation of a strategic asset allocation based on your unique set of financial circumstances and risk tolerance. We determine this strategic asset allocation after determining the appropriate level of risk necessary to obtain the growth needed to achieve your goals and financial independence. This is the scientific portion of our investment-specific strategy.

Disciplined Portfolio Rebalancing

  • In conjunction with having a broadly diversified portfolio that employs strategic asset allocation, we believe one of the most important and effective tools for investment success over time is rebalancing.
  • On a semi-annual basis (or more often if deemed necessary), the portfolio shall be rebalanced to bring the overall investment portfolio diversification back within recommended strategic asset allocation guidelines. Employing a “sell high, buy low” strategy, we add to areas of the portfolio that are undervalued, and reduce areas that are overvalued.
  • The rebalancing strategy is not meant to be overly constrictive or regimented, and is meant simply as a general guideline. Each investment and situation shall be evaluated on a case-by-case basis before rebalancing occurs.

Tactical Portfolio Adjustments

  • Towerpoint Wealth believes it is myopic to simply set this strategic asset allocation and not have the flexibility to adjust it based on current, or more importantly, assumed future economic and market conditions. This part of our investment strategy is known as tactical asset allocation, where decisions are made on an as-needed, as-appropriate basis. These tactical decisions are driven by our research and belief(s) regarding which market sectors/asset classes may be undervalued and poised for a recovery, and which may be overvalued and poised to retract, and can be viewed as an “artistic” overlay to our “scientific” backbone strategic asset allocation and rebalancing strategy.
  • These decisions can sometimes seem counterintuitive to clients (why would we want to reduce what has done well and add to what has done poorly?) but we believe the intermediate and longer-term benefits to strategic and tactical rebalancing are both documented and attainable. However, both confidence and discipline are required. As Warren Buffett said: “Be fearful when others are greedy and greedy when others are fearful.


Tax Sensitive

  • Taxes are the second of the two necessary evils and can severely impact investment returns if not controlled. We focus on keeping the tax impact of our investments at a minimum not only through careful fund screening but also intentional asset location and tax-loss harvesting, when available.

Towerpoint Wealth Investment Committee:

Our Investment Committee of five includes three of Towerpoint Wealth’s own, Joseph Eschleman, Nathan Billigmeier, and Steve Pitchford. The committee also includes two outstanding outside professionals, Kevin Cooper and Scott Welch. We believe including outside professionals in our Investment Committee is crucial to finding the right balance for our committee and its ongoing mission to create optimal target portfolios that are consistent with our six core investing principles.

So exactly what steps does the Investment Committee take to accomplish this mission?

Our Investment Committee Process:

  • Define the objectives of our target portfolios
  • Design the mix of assets (bonds, stocks, and alternative investments) to be included in each target portfolio
  • Evaluate the individual investment fund options that are consistent with our core investing principles to be included in our target portfolios (please see our Individual Fund Selection Process below for more details).
  • Implement portfolio construction using these fund investment options 
  • Monitor and analyze target portfolios
  • Consider modifications and tactical adjustments to the portfolios as the current market environment dictates

Our Investment Committee Process

Individual Fund Selection Process:

  • Identify individual investment funds consistent with our core investment principles
  • Deep dive into each of these funds – research fund fees, tax costs, performance, and underlying holdings
  • Compare vetted funds in the same asset categories against each other
  • Select best fund in each specific asset category
  • Monitor fund performance and consider alternatives should the fund composition materially change

How Do We Select the Funds to Include in Your Portfolio?