FAQ'S




What is your investment philosophy?

Our investment approach is based on Nobel prize-winning research, not on hope, market-timing or stock-picking.  It is repeatable and requires no ability to predict the future.  It is not based on anything that happened last year or last quarter.  It is not based on anything expected to happen next quarter or next year.

We begin by developing a long-term investment plan for each client.  A critical element of each investment plan is an appropriate, long-term asset allocation.  Great care is taken in determining the correct asset allocation because we know it is one of the most important decisions we will make.  We implement the asset allocation primarily using index funds due to their superior long-term performance relative to actively managed funds.  We construct investment portfolios capable of delivering higher returns with less risk by focusing on statistically significant sources of return, namely small cap stocks and value stocks across US, international and emerging market equities.  Bonds are added to portfolios to the extent capital preservation is a goal.

Our disciplined process for rebalancing portfolios during the inevitable ups and downs of the financial markets keeps risk at the appropriate level and enhances returns through the process of selling high and buying low.  By focusing on asset allocation, superior portfolio construction, low costs, tax-efficiency and disciplined rebalancing, we deliver investment success for each client.

back to top

What is an index fund?

An index fund is simply a basket (portfolio) of stocks—hundreds, if not thousands of stocks.  By owning all the stocks in a particular market or market sector, the index fund mimics the performance of the market (or sector).  A well-known example of an index fund is the Vanguard S&P 500 Index Fund, which tracks the performance of the S&P 500 Index—the 500 largest publicly-traded companies in the United States.  In the management of such a fund, no attempt is made to pick "attractive" over "unattractive" securities or to time the market.  The goal, rather, is to earn the collective return of all 500 stocks.

By minimizing costs (low expense ratios) and managing tax-efficiently (infrequent trading), index funds are able to consistently deliver the returns of the market.  These cost and tax advantages are extremely difficult for an active manager to overcome, as evidenced by the superior long-term performance of index funds.  But don't take our word for it, read what some of the brightest minds in finance have to say about whether you should use index funds or pursue active management.

back to top

Isn't indexing boring?

Yes.  This is precisely why indexing is so successful.  To paraphrase Warren Buffet, when it comes to investing, "excitement is your enemy."

back to top

Why pay you when I can buy index funds on my own?

Good question.  Clients have typically cited one (or more) of the following four reasons as the primary motive behind hiring Vista:

  • Superior long-term performance: Quite frankly, some of the best index funds are simply not available to the general investing public.  As a registered investment advisor, Vista has access to fund companies and cheaper share classes that retail investors do not.  Utilizing these investments to build a smarter portfolio paves the way for higher long-term returns.
  • Ongoing research and management: There are hundreds of index funds from which to choose.  Expense ratios, portfolio structure, tax efficiencies and management expertise vary tremendously.
  • Peace of mind and simplicity: The majority of our clients have neither the time nor the inclination to consistently execute their own investment strategy, particularly during retirement.
  • Protect you from yourself: Even the best investment plans are severely tested and often abandoned during times of extreme optimism and pessimism.  Hiring Vista to execute its disciplined, repeatable strategy provides insurance against making an emotional, ill-advised decision at just the wrong time.

Clients also find great value in the wealth management services we provide in addition to our investment advice—at no additional charge.

back to top

With what types of clients do you work?

Although primarily based in the Pacific Northwest, our clients reside in twelve states.  They have a broad range of employment backgrounds, ages and investment objectives.  The majority of our client base consists of individual investors' taxable, IRA and 401(k) money, but we also manage investment portfolios for trusts, corporate profit sharing plans and charitable organizations.  We have helped our clients transition from their working lives into retirement, manage their wealth and develop long-term plans for their assets.  Our clients typically have more than $1,000,000 in investable assets.

back to top

What type of investment research do you use?

Each investment portfolio is based on research tested by the world's leading academics and financial economists.  We access this research through white papers, financial journals, seminars and other sources.  To stay abreast of current market conditions and develop candidates for investment, we utilize the internet, newspapers and magazines.  We also have access to independent third-party research, sell-side Wall Street research, Value Line and Morningstar.  Regardless of the source of an idea, we never simply implement a third party's recommendation.  Every investment vehicle we use must pass our own rigorous research process before it is considered for inclusion in client portfolios.

We are continually researching new areas of investment for our clients.  For example, we have enhanced client portfolios by identifying lower cost and more tax-efficient vehicles for investing in U.S. micro cap stocks, international and emerging market stocks and international real estate.

back to top

How are you compensated, and when do you get paid?

We charge a management fee based on a percentage of assets under management.  We accept no commissions or other forms of compensation.  Our fee is quoted as an annual percentage, and is billed quarterly in arrears.  For example, if our annual fee is 0.95%, then 0.2375% is applied to each ending quarter account balance.  The fee is normally deducted directly from the client's investment account(s).

back to top

What services do you offer outside of investment management?

Personal management of client investment portfolios is our core strength.  Portfolio management, however, does not occur in a vacuum.  Investment portfolios are managed to the unique financial and personal situations of each investor.  We are proactive in helping our clients with a number of personal financial planning issues at no additional charge.  Some of the issues with which we have helped our clients include:

  • Providing financial projections based on living expenses, client assets, tax rates, assumed inflation rates and assumptions unique to each client's spending plans and goals.
  • Guidance on gifting strategies, including amounts and forms of the gifts.
  • Helping to design strategies to save for specific long-term goals, such as retirement, college education, or a second home.
  • Analyzing client holdings, such as stock options, concentrated and highly appreciated securities, and stock purchased through employee stock purchase programs.
  • Offering advice on tax-deferred retirement plans.

back to top

How will you communicate with me about my account?

On a quarterly basis, you will receive a written investment performance report and newsletter.  We will communicate with you on the phone or via email regarding most trades, and the rationale behind them.  We contact most of our clients at least 15-20 times per year, including face-to-face meetings, emails and phone conversations.  Clients are encouraged to contact us at any time to discuss their investments or other financial planning issues.

back to top

Who will be working on my account?

Each client works with a dedicated portfolio management team which is responsible for developing, implementing, and monitoring the investment portfolio.  These portfolio managers will typically be your primary contact at Vista and will meet with you regularly to review your portfolio.  A client service representative will also assist you with account transactions, tax and performance reporting, and address any questions and issues that arise on a day-to-day basis.  Vista's client service personnel work closely with our portfolio managers to ensure client needs are handled efficiently and effectively.

Two portfolio managers and a client service representative will be assigned to your account, but investment decisions will be based largely on the investment team's strategy, philosophy and research.  Each portfolio manager is a member of the investment team that explores and evaluates the investments and financial planning issues impacting our clients.  This ensures that Vista's core beliefs and investment philosophy are consistently applied.

back to top

Will I be able to take part in the investment decisions?

Yes. You are our primary source of information as we identify your goals, time horizon, investment constraints and the level of risk to be taken. Clients hire us to manage their portfolios on a discretionary basis. Discretionary means we make investment decisions on your behalf without getting explicit approval in advance, provided the actions adhere to the investment plan we have developed with you.

back to top

I want to manage some of my investments on my own. Can I still work with you?

Yes. We can set up a separate account(s) that will hold the assets you would like us to manage, and charge a fee only on those assets.  We do require that the assets under our management meet our normal account minimums.

back to top

Will I have to liquidate my current investment portfolio to work with you?

Often times, changes will need to be made.  These can be implemented over time or can be adapted to incorporate some of your current investments.  In some cases, clients have significant unrealized gains in one or more existing holdings that, if sold, would trigger a large tax bill.  In other cases, clients have specific investments they want to keep.  In every case, we use our best judgment in recommending an appropriate portfolio that serves your goals, takes advantage of our investment philosophy and minimizes any tax impact.

back to top

Will you charge me an extra fee to consult with my tax advisor or estate planning attorney?

No, in most cases such consultations are a routine part of our role as your financial advisor.  We welcome the opportunity to discuss tax or estate planning opportunities with other professionals with whom you work.  We realize that they may charge you for their time speaking with us, so we will not meet with them without your express permission.

If you have a need to find a tax professional, attorney, or other advisor, we are happy to provide referrals to professionals we believe can assist you.  We accept no referral fees from anyone in return for referring a client.

back to top

Will I get reports to help me prepare my tax returns?

Yes.  We can send you a report of earnings from interest, dividends, realized capital gains, and capital gains distributions from your broker.  We can also prepare a report showing the unrealized gains in your account at any time.

back to top

Can you provide advice on how I should invest the money in my company's 401(k) Plan?

Yes.  If you are participating in your company's 401(k) plan, we will provide guidance on how to choose among the funds available to you.  We consider this part of our role as your financial advisor and will not charge you an additional fee.

back to top

How is your firm involved in my community?

Being involved in the community is important.  We believe that by being active participants in our communities, we develop as individuals and as professionals.  This leads to happier and more fulfilling lives for our advisors.  In addition to contributing 2% of our annual firm profits to various nonprofit organizations, we encourage each of our professional staff to volunteer their time and energy to charitable causes of their choosing.

back to top

How will my account be tax-managed?

Every taxable portfolio is managed with the goal of maximizing after-tax returns.  This involves favoring tax-efficient index funds, performing a cost-benefit analysis for each trade and managing investment portfolios on what we call a "consolidated" basis.  "Managing to consolidated" means we manage multiple investment accounts (taxable, IRAs, and 401(k)'s) as if they were one account.  This allows us to place the most highly taxed assets in tax-deferred accounts, while putting more lightly taxed assets in taxable accounts.  For example, whenever possible we place bonds and real estate (REITs), whose payouts can be taxed at income rates of up to 35%, in IRAs and 401(k)'s.  Equities, whose capital gains and dividends are taxed at a federal rate of 15%, are strategically placed in taxable investment accounts.  After-tax returns are further maximized by limiting portfolio turnover and realizing losses, where possible, to offset realized gains.  We also consider any "one-time" client-specific issues (bonus, sale of company stock, exercise of stock options) and take the necessary action to maximize after-tax portfolio returns.

back to top

What is the process to start working with you?

We recommend starting with a brief phone call to understand what your overall goals, objectives and needs are and, if appropriate, to plan the first meeting.

Our primary goal in the first meeting is to gain a better understanding of you.  Your goals, objectives, time horizon, personal beliefs, investment experience, and willingness and ability to take risk are our chief concern.  Our knowledge and understanding of you and your needs are critical to the successful development of your investment plan.

During this meeting, we will also introduce you to our financial advisors and client service representatives, discuss our investment philosophy and reasoning behind it, and describe how we believe our approach might best be applied to your situation.

If you make the decision to hire us, we take you through the steps of establishing our advisory relationship and the specific implementation steps for your investment program.

back to top