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Our Investment Philosophy

Our Investment Philosophy has 6 guiding principles: 

Embrace Market Volatility, Global Asset Allocation, Systematic Investing, Multiple Portfolios, Selecting the Best Managers, Periodic Re-balancing.

  1. Embracing Volatility

Understanding market volatility is at the core of our investment philosophy. Market volatility in all markets is a non-stop fact-of-life that occurs across all sectors, both domestic and global.  How one reacts to it is a key to successful investing -does one shun or embrace it?  At Merrill Financial Associates we believe that there is opportunity in volatility.  Warren Buffet: “Many investors are elated when stocks rise and depressed when they fall. This makes no sense. Only sellers of stocks should be happy to see stocks rise. Buyers should much prefer sinking prices. …A market downturn doesn’t bother us. For us and our long-term investors, it is an opportunity to increase our ownership of great companies with great management at good prices. Only for the short-term investors and market timers is a correction not an opportunity.”  Baron Rothschild: “When there is blood on the street, I am buying.”  Shelby Davis: “You make most of your money in a bear market - you just don’t realize it at the time.”  


  1. Global Asset Allocation

We believe that global asset allocation helps minimize risk and maximize returns. Our proprietary asset allocation program allocates money to the world’s money managers, each specializing in a particular sector or region of the world’s economy. Each client account is assigned its own asset allocation portfolio, which is then updated daily, and rebalanced periodically.


  1. Systematic Investing

Systematic Investing involves electronically adding money to an account on a regular basis: daily, weekly, or monthly. Benjamin Graham: “Systematic investing will pay off ultimately, regardless of when it is begun, provided that it is adhered to conscientiously and courageously under all market conditions.”  


  1. Multiple Portfolio Strategy

We encourage each client to have multiple portfolios, each with its own unique blend of strategy, risk, and return. By investing in multiple portfolios, clients can have more confidence in achieving their lifetime goals. Clients typically have three portfolios:

  • Conservative Portfolio (Nest-egg money)
  • Moderate Portfolio (Growth and income)
  • Growth Portfolio (Primarily Growth & Growth)


  1. Selecting the Best Managers

We are an open-architecture firm, with a universe of investment options. During our portfolio construction, we focus our analysis on identifying investment managers that offer strategies to both maximize returns and minimize risks. The resultant manager selections are continuously under scrutiny by our research team to ensure that we are offering our clients the optimal solutions within each portfolio strategy.


  1. Periodic Rebalancing

Periodic Rebalancing involves selling portions of appreciated assets and buying portions of depreciated/less appreciated assets.  This process helps growth investors to buy low, and income investors to sell high.  Each client is preassigned specific dates when their portfolios are analyzed and rebalanced.  For those clients who are systematically adding-to or taking-from their portfolios, rebalancing occurs at the time of the purchase or sale.


*Systematic investment plans do not assure a profit or protect against loss in declining markets, such plans involve continuous investment, regardless of market conditions. Markets will fluctuate, and clients must consider their ability to continue investing during periods of low price levels.

**Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.