Efficient Portfolio Theory
Efficient Portfolio Theory
In this booklet you'll learn:
How the seven pillars of investing maximize returns • How planning is the road map, while portfolio efficiency is the engine that gets you there
Read Our Guide

Academics Behind the Linden Thomas & Company Approach

First, our team of financial planners works alongside each client to develop a financial plan that focuses on meeting each client's growth and yield needs. Most financial planners assume planning is just based on a score which measures savings and spending habits. Our focus is to

measure both cash flow and growth needs and then construct a portfolio of individual securities, not products. Through this careful planning and portfolio construction, our clients end up with a well-constructed, carefully executed portfolio where each security is designed to be a part of the overall portfolio with a focus on maximizing results - both growth and net yield.

Planning

  • Growth needed, years to retirement
  • Yield needed, years in retirement

Linden Thomas & Company's discipline has two key ingredients which drives the success of each of our client's portfolios.

  • Accurate planning
  • Maximizing growth and yield results through efficient portfolio construction

"If a financial plan is the road map, then the portfolio efficiency is the engine that gets you to your destination successfully."
  ~ Stephen L. Thomas

Why Investors Prefer Our Approach (maximizing results through portfolio efficiency)

Our discipline stems from the idea that each investor, whether realizing it or not, wants a good and well thought out plan. Equally, they want to maximize the results. While planning is your road map, the car that gets you there is results. All too often investors or their advisors have a good road map, but the car or engine that gets them there is weak or peppered with inefficiencies or hidden costs. At Linden Thomas & Company our portfolios are built to maximize results through efficient portfolio construction.

Efficient Portfolio Theory is essentially the focus of empowering each client's results so that when applied over time, it allows each investor a richer, more meaningful, and more transparent way to maximize results.

Linden Thomas & Company's focus on results and applying Efficient Portfolio Theory has seven key disciplines.

These disciplines include:

Portfolio additions and monitoring - This is the ongoing application as the portfolio grows. Our fixed-income and equity team maximizes results by having a defined investment process.

Our investment process includes:

  • Fixed-income yield to maturity and yield to worst monitoring - enhancing net cash flow
  • Index factor reconstitution - ensures quality
  • Tax-efficient overlay - minimize taxes
  • Active equity manager and index discipline/additions or deletions - helps maximize long term needs of each client
  • Portfolio migration - helps ensure each of our client's long-term needs is being met

Investor ownership and transparency - by giving each investor direct ownership of each holding this gives them both control and transparency to monitor.

  • Gains or losses
  • Tax-loss harvesting opportunities
  • Gifting benefits
  • Results of holdings
  • Diversification and sector allocation
  • Monitor cost
  • Insight to net cash flow
All seven of the portfolio disciplines help contribute to the long-term results. While financial planning is still the road map to retirement, portfolio efficiency is the engine that maximizes the results that gets you to the destination and beyond.

Enhancing Client Results through Yield

Prior to Retirement
Because each holding is chosen based on our yield focus, and as yield or interest is regularly paid into the portfolio prior to retirement, each interest payment is reinvested into other bonds. Over time, this not only adds to the foundation of the portfolio but also to the net cash flow - ultimately increasing compounded results.

During Retirement
Because yield is maximized through individual holdings, it decreases the need to draw down other areas like equities. Because of reducing the need to draw down during retirement years, it helps increase inflationary growth during critical years of retirement.


Efficient Portfolio Theory
Efficient Portfolio Theory
In this booklet you'll learn:
How the seven pillars of investing maximize returns • How planning is the road map, while portfolio efficiency is the engine that gets you there
Read Our Guide