The team at SHFG create comprehensive strategies that strive to accumulate, manage and transition wealth and businesses. Together with our network of professionals, we align expertise to deliver solutions to fit your specific needs. Our experience over multiple market cycles enables us to deliver tested, custom strategies; we help prepare you and your family for all of the events in life; those you can control and those you cannot control.
SHFG is an independent Registered Investment Advisor, registered with the SEC, that offers securities. Because we are independent, we are not incentivized to sell proprietary funds or specific investment products. Instead, you get unbiased financial advice based on the best tools for your specific needs.
Our Actionable Plan Approach
MAP – My Action Plan
Based on the strengths, weaknesses, opportunities and threats we see in your current financial picture. We develop a 2 year action plan that outlines the planning topics we will be cover over the next 2 years. The action plan is our method for maintaining course and continuing to monitor and move forward with your plan. This action plan maintains balance between living life and waiting to live life (i.e. focusing solely on retirement).
Investment Philosophy
Create a plan and Stay the Course
Investing based on a plan we have developed with you, incorporating your goals, values, and objectives, combined with your stage of life and investment horizon, while balancing growth objectives and risk tolerance. We will select appropriate investment tools for diversification, then continue to monitor and optimize over time, and not waver based on the headline of the day.
This philosophy translates into 3 principles of investing:
1 – Goals: Create clear, appropriate investment goals
We will develop appropriate investment goals that are attainable. We believe success should not depend on enormous investment returns or impractical saving or spending requirements. Defining goals clearly and being realistic about ways to achieve them can help protect you from common mistakes that derail achieving your desired goals.
2 – Balance: Develop a suitable asset allocation using diversified investment tools1
A sound investment strategy starts with an asset allocation aligned to your objectives and tolerance for risk. The allocation should be built upon reasonable expectations for risk and returns and use diversified investments to reduce exposure to unnecessary risks. Both asset allocation and diversification are rooted in the idea of balance. Because all investments involve risk, managing the balance between risk and potential gains through the choice of portfolio holdings may reduce the risk of the portfolio.
3 – Discipline: Maintain perspective and long-term discipline
Investing and your money can provoke strong emotions. During times of turmoil, some investors may find themselves making impulsive decisions or becoming paralyzed, unable to implement an investment strategy or rebalance a portfolio as needed. Our discipline and perspective help you remain committed to a long-term investment program through periods of market uncertainty.
Clear Investment Philosophy
The world’s leading investors will tell you that nothing is more important to long-term investment success than a clear investment philosophy. More important than a sound investment strategy; a strategy, while important, is nothing more than a manifestation of an investment philosophy. Strategy can evolve as circumstances and investment horizon change; however, an investment philosophy is based on the enduring beliefs that guide your decision-making. In times of market upheaval and uncertainty, your investment philosophy enables you to control your emotions, shut out the noise and stay focused on the things that really matter over the long term.
Too often we see investors focus on the short-term outcome(s) when, in reality, it may have little, to no impact on long-term results of a well-conceived investment strategy. A random 300 point drop in the market in reaction to the news or event, while unnerving and disconcerting, can be nothing more than a blip in a long-term time horizon. This is what your investment philosophy is for.
History has shown that while many monthly statements have shown negative returns, much fewer have sustained those returns for the entire year. Since 1928, the S&P 500 has shown that while around 41% of monthly returns were negative, only 32% of annual returns were negative, while 59% of monthly and 68% of annual returns have been positive. The S&P 500 has only seen two 10-year periods with negative returns since 1928, and only one occurred after the 1930s. This highlights how rare it is to have a full decade of negative performance. Over that period, the S&P 500 has delivered an average annual return of approximately 10.26% (slightly higher than the previous 9.7% in the 2014 study) through the end of 2023. This long-term growth underscores the index’s resilience despite occasional volatility. Furthermore, large-cap and small-cap companies have not had a 10-year period with negative growth since the 1930s. Large-cap stocks have typically delivered around 10-12% annualized returns, while small-cap stocks have outperformed slightly with returns between 11.2-14.4%. Again, this historical perspective shows that while short-term fluctuations are common, continued and sustained long-term investing in continues to provide solid returns. Investors who remained invested in the S&P 500 over multiple decades, despite periodic downturns, have generally been rewarded. The overall trend highlights the importance of staying the course, especially during volatile periods. Dollar-cost averaging and other long-term strategies help mitigate the risks of market timing.2
With that said, it is important to understand that past performance does not predict future performance. Our goal is to stay focused on the long-term and avoid the rollercoaster of emotions that occur with daily and monthly market swings.
The basis of our Philosophy3
Javier Estrada conducted the best long-term study relating to Market Timing. Javier Estrada, a finance professor at the IESE Business School at the University of Navarra in Spain, studied the Dow Jones Industrial Average from 1900 to 2006 to find out how important those few “big days” are. He looked at nearly a century’s worth of day-to-day moves on Wall Street and 14 other stock markets around the world, from England to Japan to Australia. He found that if you missed the 10 best days you missed out on a lot of the gains. A similar study by J.P. Morgan revealed that missing just the 10 best days of market performance over a 20-year period (1999–2018) can significantly reduce returns. If an investor had missed these top-performing days, their returns would drop from 5.62% per year to just 2.01%. Missing the best 20 days would result in negative returns. These “best days” often occur during or shortly after market downturns, meaning those who pull out during volatile periods could miss the critical rebound. Over an investing period of about 40 years, he calculated, missing the 10 best days resulted in portfolios 65% less valuable than those who stayed focused and in the market. It cost investors more than half their capital gains. While the results for effective timing can be staggering, but given that the 10 “best days” represent 0.03% of the days in the sample, the odds against market timing are overwhelming.
Further, a study published in the February 2001 issue of Financial Analysts’ Journal, titled Market Timing and Roulette Wheels, tested and compared the results between the market timing and buy-and-hold strategies. The authors studied data from 1926 through 1999, in an examination that included all six major U.S. asset classes. The objective: To determine whether market timing was an effective strategy. This study was revisited in 2012.They analyzed a variety of monthly, quarterly and annual market timing strategies, producing more than one million possible market timing sequences with more than one million different outcomes. Each of these outcomes was compared to the buy-and-hold strategy for the same time period. The study of a million-plus investing scenarios concluded that the buy-and-hold strategy beat market timing 99.8% of the time.
1Diversification or strategic asset allocation do not ensure a profit or protect against a loss.
2Sources: 8 Lessons from 80 Years of Market History, Standard & Poor’s Corporation and Haver Analytics. Note: The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Data from the 2014 report have been updated through 2023 utilizing a variety of data sources, to include calcuattor.com, Longtermtrends.net, LongTermTrends.net, Investopedia, Investopedia.
3These studies are presented for informational purposes only. No investment strategy can guarantee success.