What We Do
Our Strategy
“After 33 years of wall street experience, academic and professional study, and extensive financial market research, I strongly believe that successful retirement investing comes down to 3 must-haves.”
Paul Sebetic, Founder Sebetic Advisors
1
Investment portfolio should have a large allocation to stocks
Throughout history, long-term investing in high quality U.S. dividend stocks has substantially outperformed bonds, cash, and inflation.
For each $100 moved from bonds to stocks, the expected return over a 30-year retirement will result in $81 more after-tax income to spend during retirement and a $261 higher ending balance to pass onto heirs.
2
Historically, disciplined stock investing with long term holding periods has completely eliminated the risk of loss from investing in stocks.
Since 1926, U.S. large company stocks have never had a fifteen-year period with a negative return.
3
Investing in a lower cost /tax efficient manner over a 30-year period makes a significant difference in the ending investment balance.
A long term buy and hold strategy, coupled with lower costs, can dramatically increase after tax returns. A lower cost tax efficient stock strategy over a 30-year retirement can result in a 72% higher ending balance compared to a typical stock mutual fund.
The Math Behind the Must-Haves
In the example below, we assume that three brothers each have one million dollars to invest over a thirty-year period. Behold the power of the “Three Must Haves”.
Our Offering
Our PortfolioAn equity portfolio specifically designed for retirement investing
- A comprehensive retirement investing strategy OR an excellent complement to an investor’s existing retirement program
- Pays monthly distributions which in the first year will total 4% of the opening capital balance and targets annual increases thereafter equal to inflation
A highly diversified portfolio
- Target 100 companies
- Diversify by sector, industry, country, company size and style
- During periods of elevated equity valuations, may invest in money market funds and or short-term fixed income instruments
Invest in high quality companies
- Strong history of profitability & growth with prospects for continuation in the future
- Strong balance sheets, with either net cash or low levels of debt
- Selling at reasonable valuation levels
Investment Selection ProcessIdentify potential investment opportunities through:
- Market Research
- Investment Periodicals
- Numerous stock filter and screening tools
- 13F Reviews
- Mutual Fund / ETF holdings analyses
- Other
Analyze stocks using Sebetic Advisors Proprietary Valuation Model and 10-Year Return estimating tool
- Tool enables us to quickly screen a large number of stocks
- Only those companies that pass the four qualifiers – rate of growth, rate of profitability, balance sheet strength, and current valuation are reviewed further
Comprehensive review – during this phase we:
- Analyze 20 years of financial statements (or inception to date)
- Review Company’s latest filings on the SEC website
- Review Corporate governance policies
- Review Board and senior management
- Analyze versus competitors and the industry
- Evaluate future prospects and other items
Finally, we select the high quality investments that we want to own “forever”
Portfolio ManagementFocus on tax efficiency
- Very long-term holding periods defer taxes
- Dividends / long term capital gains taxed at an advantageous rate
- If clients invest with us in both IRA and taxable accounts, we will seek to locate assets in the most tax efficient vehicle
- We will sell a company if share price increases substantially and we believe there are better alternative investment opportunities (after accounting for taxes on gains)
- We will sell if the company fails to keep up with the conservative forecast created upon investment – either operating income growth or balance sheet strength
- If a company declines substantially in value, but we do not believe the company fundamentals have deteriorated, will look to take a short-term tax loss while maintaining exposure to the company
Diversification – will manage portfolio to diversification targets (sector, industry, country, company size and style)
Summary of Terms Safeguarding of Assets
- Client opens a brokerage account at Interactive Brokers, where only the client can deposit and withdraw funds out of the account
- Interactive Brokers’ technology enables the efficient and cost effective replication of our strategy across client accounts
- Client enters into an agreement hiring Sebetic Advisors to manage the portfolio
Low Fees
- Management fee of 0.5% per year
- Fee is approximately 50% lower than the average Financial Advisor fee for clients with a $1 million investment (source: Investopedia)
- A second fee option for qualified investors (investable net worth $2.1 million or more) is available
- Management fee of 0.1% per year and an annual performance fee equal to 1/3 of the excess performance over the S&P 500
Account Size
- Clients typically invest $150,000 or more
Financial ReviewReview
- We will send a preliminary questionnaire so that the client may gather the necessary data and begin thinking about their short and long term goals
- Any data sent will be reviewed and analyzed prior to our meeting
Assess / Recommend
- We will perform a confidential, no obligation retirement financial analysis (either in-person or via video conference)
- Based on our review we will make any recommendations that may be appropriate. Clients typically find this discussion extremely valuable
Share
- We will then discuss the Sebetic Advisors Strategy and Portfolio
- We will provide specifics on investments, investment selection, portfolio management, etc. and answer any remaining questions
Explore
- Together we will explore whether our strategy and portfolio is right for you
- This is NOT a high pressure sales pitch. If our offering makes sense for you, we can explain our onboarding process
Our Offering
An equity portfolio specifically designed for retirement investing
- A comprehensive retirement investing strategy OR an excellent complement to an investor’s existing retirement program
- Pays monthly distributions which in the first year will total 4% of the opening capital balance and targets annual increases thereafter equal to inflation
A highly diversified portfolio
- Target 100 companies
- Diversify by sector, industry, country, company size and style
- During periods of elevated equity valuations, may invest in money market funds and or short-term fixed income instruments
Invest in high quality companies
- Strong history of profitability & growth with prospects for continuation in the future
- Strong balance sheets, with either net cash or low levels of debt
- Selling at reasonable valuation levels
Identify potential investment opportunities through:
- Market Research
- Investment Periodicals
- Numerous stock filter and screening tools
- 13F Reviews
- Mutual Fund / ETF holdings analyses
- Other
Analyze stocks using Sebetic Advisors Proprietary Valuation Model and 10-Year Return estimating tool
- Tool enables us to quickly screen a large number of stocks
- Only those companies that pass the four qualifiers - rate of growth, rate of profitability, balance sheet strength, and current valuation are reviewed further
Comprehensive review – during this phase we:
- Analyze 20 years of financial statements (or inception to date)
- Review Company’s latest filings on the SEC website
- Review Corporate governance policies
- Review Board and senior management
- Analyze versus competitors and the industry
- Evaluate future prospects and other items
Finally, we select the high quality investments that we want to own “forever”
Focus on tax efficiency
- Very long-term holding periods defer taxes
- Dividends / long term capital gains taxed at an advantageous rate
- If clients invest with us in both IRA and taxable accounts, we will seek to locate assets in the most tax efficient vehicle
Continuously monitor valuations
- We will sell a company if share price increases substantially and we believe there are better alternative investment opportunities (after accounting for taxes on gains)
- We will sell if the company fails to keep up with the conservative forecast created upon investment - either operating income growth or balance sheet strength
- If a company declines substantially in value, but we do not believe the company fundamentals have deteriorated, will look to take a short-term tax loss while maintaining exposure to the company
Diversification - will manage portfolio to diversification targets (sector, industry, country, company size and style)
Safeguarding of Assets
- Client opens a brokerage account at Interactive Brokers, where only the client can deposit and withdraw funds out of the account
- Interactive Brokers’ technology enables the efficient and cost effective replication of our strategy across client accounts
- Client enters into an agreement hiring Sebetic Advisors to manage the portfolio
Low Fees
- Management fee of 0.5% per year
- Fee is approximately 50% lower than the average Financial Advisor fee for clients with a $1 million investment (source: Investopedia)
- A second fee option for qualified investors (investable net worth $2.1 million or more) is available
- Management fee of 0.1% per year and an annual performance fee equal to 1/3 of the excess performance over the S&P 500
Account Size
- Clients typically invest $150,000 or more
Review
- We will send a preliminary questionnaire so that the client may gather the necessary data and begin thinking about their short and long term goals
- Any data sent will be reviewed and analyzed prior to our meeting
Assess / Recommend
- We will perform a confidential, no obligation retirement financial analysis (either in-person or via video conference)
- Based on our review we will make any recommendations that may be appropriate. Clients typically find this discussion extremely valuable
Share
- We will then discuss the Sebetic Advisors Strategy and Portfolio
- We will provide specifics on investments, investment selection, portfolio management, etc. and answer any remaining questions
Explore
- Together we will explore whether our strategy and portfolio is right for you
- This is NOT a high pressure sales pitch. If our offering makes sense for you, we can explain our onboarding process