Bruce Jentner is not your typical financial planner. You won’t get the president of Bath-based Jentner Financial Group to give you hot stock picks or share his economic forecast.
Jentner has subscribed to the same financial strategy through the stock market’s boom into today’s market lows. He calls it passive management, and with this approach, avoids the temptation of making a quick dollar on a hot stock or changing his strategy when times are tough.
This strategy has earned The Jentner Financial Group much recognition, including being named one of the top 150 independent wealth management firms by Bloomberg Wealth Manager.
While many people are pulling out of the stock market, Jentner’s clients are not among them. He manages the portfolios of about 100 clients, with an average account balance of about $400,000. He works on a fee-only basis and encourages clients to stay diversified.
“Even during the ’90s, when the stocks were doing well, we were still diversified,” he says. “So the stock market may have been up 25 to 30 percent, and our portfolio may have only been up 12 to13 percent, but now when the stock market is down 10 to 30 percent, we are only down 3 to 5 percent.”
Jentner says staying broadly diversified means diversification of noncorrelated asset classes, not just the purchase of many stocks. He recommends buying stock in very different asset classes: Domestic stocks large and small, and value and growth; international stocks, both large, developed countries and emerging countries; bonds; real estate and commodities.
The term “passive management” applies to the way stocks are chosen.
“Some people may try to pick investments in each asset class that they think are going to do better, and that’s what we call ‘active management,’ he says.
With passive management, you avoid picking specific stocks.
“If we think your portfolio should be in large-cap domestic growth stocks, we would then use a specially designed investment that literally buys that entire market,” he says. “Instead of having 100 stocks in it, it might have a couple of thousand. It’s designed to own the entire class, and we do that for each of the asset classes.”
He says you can’t beat this approach for long-term growth.
“If somebody wants to try to beat the market, they have to use active management. You have to pick the winners and somehow outperform the market,” he says. “Although it’s exciting at times, if you look at it beyond a six-month or one-year basis, over a decade, 97 percent of these active managers will underperform the asset class they’re trying to outperform.” How to reach: The Jentner Financial Group, (330) 668-1000.
