FFP Investment Management Philosophy

Preserve and Grow Capital

Our investment philosophy involves both preservation and growth of capital.

Our primary goal when investing is to preserve your investment capital. That is why we don't recommend a buy-and-hold investment strategy. Buy-and-hold works well during long bull markets, but also leaves one completely exposed to significant losses as we saw during 2000-2002, 2008, and at other times in our nation’s history.

However, to ensure your portfolio doesn’t lose purchasing power due to inflation, growth of capital is also very important! Therefore, maintaining a significant amount of your portfolio in stocks is necessary. In short, we strive to participate in most of the upside of a bull market with less exposure to the downside of a bear market.

Balancing these two goals during volatile financial times can be challenging!

Strategic and Tactical

Our investment philosophy employs both strategic and tactical thinking.

Strategic: First, we agree upon a suitable asset allocation for you individually. This allocation will involve putting a certain percent of your portfolio into ETFs (exchange-traded funds) that mirror various indices:

Domestic Large Cap Stocks*
Domestic Small Cap Stocks*
Foreign Developed Stocks*
Foreign Emerging Market Stocks*
Domestic Real Estate*
Foreign Real Estate*
Commodities*
Domestic Bonds
TIPS (Treasury Inflation-Protected Securities)

We may also "Overweight" whichever asset class has performed best over the preceding 3-, 6-, and 12-month intervals.

Tactical: At the end of each month, for the asset classes marked with an (*) above, we evaluate where the price trend has headed and make a Buy/Sell/Hold decision for each asset class. So, twelve times per year, we evaluate each position and decide whether or not a change is necessary. The particular parameters we utilize have historically provided a practical way to avoid much of the downside of a bear market while still allowing us to participate in most of the upside of a bull market. Research shows that this approach can significantly reduce your investment risk while also increasing your rate of return!

For The Very Conservative

For our portfolios where Capital Preservation is of utmost importance, we recommend an ETF portfolio suitably allocated across the global bond market, including:

Domestic Bonds
TIPS (Treasury Inflation-Protected Securities)
Foreign Bonds
Investment Grade Corporate Bonds
High Yield Corporate Bonds
Long-Term Government Bonds
Emerging Market Bonds

Global Tactical Strategies

For information on FFP Global Tactical portfolio strategies, please contact Wade Hampton or Terry Fitch at 866.603.4800.

Custodian for Investment Accounts

We utilize Interactive Brokers, LLC as the custodian for our client’s investment accounts. Interactive Brokers is a strong and well-respected firm with over $4.8 billion in equity capital and has been in the trading business for 33 years. The firm handles over 1,000,000 trades per day, and conducts business in over 80 markets around the globe. They provide an excellent platform to actively manage our clients’ assets. Clients have online access to their accounts through Interactive Brokers website, and can check account activity as frequently as they wish. We tailor each account to match a client’s specific needs or profile.

Our account management fee is very reasonable for assets under management and scales downward, based on the size of the account. For more information on Interactive Brokers, please click this link:
http://www.interactivebrokers.com/en/general/about/ibgStrength.php..