Why We Do What We Do
When talking with individuals who are interested in learning more about what we do at Kruse Asset Management, we try not to bombard them with the technicalities of what we do on the behalf of our clients.
We feel it’s more important that somebody knows why we do the things we do when it comes to managing their portfolio rather than necessarily what it is we’re doing.
Listed below are some of the things we do here at KAM and the reason for why we do them:
What: We manage money for high net-worth clients and seek to provide them with returns which annually exceed that of the market.
Why: It is galling to believe that most money managers (60-80 percent of them) underperform the market. Not only do they destroy value in the portfolios they manage, but they often get rich whilst doing so. We believe—as we think most people would—that advisors should add value if they are charging for their services. Our clients have worked their whole lives to build their wealth and them trusting us with their financial future is a responsibility that we take with the utmost seriousness. We believe that the most important thing we offer our clients is a sense of complete trust and security.
How: Statistical analysis is at the core of everything we do. This approach has seen us double the performance of the S&P over the past ten years. We outperformed the market for eight of those ten years without taking on any additional or excessive risk. Our mantra is: Don’t just be another statistic; use them to your advantage.
What: At Kruse Asset management we remove personal biases from the investment process.
Why: Our fiduciary duty to our clients means that we must put our clients’ interests before our own. That is not the case for banks and brokerage firms. We only ever make a change to a client’s investments—buying or selling a stock; increasing or decreasing their exposure to an asset class—when it will benefit them. We don’t act upon a feeling or on advice from others.
How: We utilize an active, systematic approach to selecting investments for our clients through our statistical analysis and quantitative strategies which have a proven track record of long-term outperformance. Our belief is that an objective approach to investing is a superior one, and our past decade worth of results vindicates that.
We invest as objectively as possible
What: We ensure that your investments are in line with your acceptable level of risk.
Why: It is our duty to ensure that each of our clients has a portfolio that accurately represents their investment goals—how conservative or aggressive they may be. We have seen multi-million portfolios of the elderly destroyed due to high levels of risk not compatible with their financial aims and we do not want to see the same happen to anyone else.
How: We pride ourselves on building excellent relationships with our clients and understanding their investment needs. We currently utilize cutting-edge risk analysis software to objectively provide a clearer understanding of risk tolerance for our clients and work together to formulate an investment strategy that works for them.
What: We believe in true diversification when it comes to the asset allocation of your portfolio—something which many investors far too easily neglect.
Why: The recent volatility in Europe and China shows how important a fully diversified portfolio is in avoiding taking on any excessive risk. A diverse asset allocation may not be the easy thing to do for money managers, but it is the right thing to do for clients. At KAM we do not take shortcuts to make our workload lighter but do everything in our power to maximize the performance of your investments.
How: Regardless of how aggressive or conservative an investor may be, it is nothing but irresponsible to have a portfolio concentrated in just two or three asset classes—which unfortunately can often be the case for investors using a money manager who do not take much of a pro-active role in their portfolio. To limit risk exposure and protect clients from potential downturns in different market sectors, we invest across over a dozen distinct asset classes.
Everyone enjoys diversity
If you are interested in learning more about not just what we do at KAM, but why too, then please get in touch with us. We offer free portfolio analysis to those who’d like a fresh perspective on their investments.