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TruNorth Capital Manifesto

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  • 1. Investment Management Manifesto People Like Us Invest Like This™ TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013
  • 2. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 What the …. ? Most investors fail to earn the returns the market provides, driven by high-fee financial advisors, poor stock and fund selection, and bad market-timing because of erroneous forecasting.
  • 3. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 We Think Differently  Keep fees super low.  Help investors achieve returns the market provides. Active stock-picking is a gamble, not an investment strategy.  Invest for the long-term, period. Market timing requires a crystal-ball, and we haven’t located one yet.
  • 4. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Quite Simply … Our mission is the relentless pursuit of financial security for investors and changing the investment world so that it ALWAYS operates with the client's interests in mind FIRST.
  • 5. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Organic Investment Management Organic Investment Management (O.I.M.) uses diversified, global portfolio strategies based on pure, unconflicted advice and unbiased, academicallyvalidated indexing strategies. O.I.M. is not conflicted by impure stock picking or artificial market-timing driven by emotion. Pure, Unconflicted Advice Unbiased, Scientific Indexing Really Low Costs
  • 6. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Manifesto #1 Capture market returns - trying to beat the market won’t happen. “Using 20 years of monthly data, we find active portfolio management fails to add value above the higher cost it imposes on investors.”* 1990 – 2010 1511 Mutual Funds *“Modern Fool’s Gold: Alpha in Recessions,” by Shaun Pfeiffer and Harold Evensky, Journal of Investing, Fall 2012.
  • 7. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Manifesto #2 Science and market-return strategies should drive portfolio construction, not stock research and market forecasting. Unbiased data and research demonstrates the superiority of market-based investments over actively managed strategies. Investment Managers 2011 Outperformed Underperformed 16% 84% Source: Standard & Poors
  • 8. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Manifesto #3 Fees paid to your Advisor matter … a lot! $6,938,552 $3,637,859 $5,743,491 $1,907,317 $3,207,135 $1,790,848 Other advisors have to produce additional returns to overcome higher fees. We call this the Break-Even Gap. *Growth of $1,000,000, assuming a 0.33% TruNorth investment 10 Yrs 20 Yrs Other Advisors 30 Yrs TruNorth advisory fee versus the 1% industry average investment advisory fee on a portfolio with a 7% annual return. The Break Even Gap is the amount of additional gains other advisors must earn for you in order to overcome higher fees.
  • 9. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Manifesto #4 “Sunlight” improves relationships and brightens expectations. Objective, transparent truths about risk versus return, asset allocation decisions, performance, and low costs must be discussed and understood by both the client and investment advisor. There will be problems meeting financial goals if we are not on the same page.
  • 10. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Manifesto #5 Know your risks and whether the risk is worth taking. Compound Avg. Return Standard Deviation* Small-Cap Stocks 11.4% 30.8 Large-Cap Stocks 9.8% 20.4 Bonds 5.4% 3.7 Cash 3.6% - Inflation 3.0% - 1926-2011 Standard Deviation shows how much variation or dispersion from the average returns exists. A low standard deviation indicates that the data points (annual returns) tend to be very close to the average; a high standard deviation indicates that the data points are spread out over a large range of values.
  • 11. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013 Manifesto #6 To improve your financial health, follow three simple rules. 1. Save More 2. Spend Less 3. Invest Better
  • 12. Most financial advisors and investment managers sell you the promise of outperformance but their results fall short all the while you continue to pay handsomely for underperformance … when you can and must do better. TruNorth Capital Management, LLC ·157 S. Kalamazoo Mall, Suite 240-3 · Kalamazoo, MI 49007 · TruNorthCapital.com · ©2013

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