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Super Research Available – Opportunities for Non-Profits/Foundations

Friday, December 23, 2016   (0 Comments)
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Super Research Available – Opportunities for Non-Profits/Foundations by Jim Hollon

Gifting days for these organizations is very special.

As Non-Profits and Foundations find ways to increase their giving, they grasp these opportunities immediately. A constant goal is to increase their giving back to charity.

Just think, twenty-six years has passed since the 1990 Nobel Award Prize gave us the “The Modern Portfolio Theory.” Question, what has happened since that time?

Two major things have happened since then that you might find out about with a little research. Matson Money, Inc. started an asset allocation platform in 1991. Mark Matson’s light came on immediately. Look, now there is a 25-year track record using “The Modern Portfolio Theory” as it’s award winners had planned for it to be applied. Second, there has been a foundation that has used this platform totally with its portfolio since May of 2000. This constitutes 16 years the advisor has helped the foundation grow their assets without even having a fund raiser.

Giving Back Results:
Consider these results, as you look at the facts. From 5-17-2000 through 9-5-2016 (time of this report), this foundation gave back 121% of the seed money (original asset amount) and 118% of the seed money remained in the portfolio. This is the result of total diversification when “The Modern Portfolio Theory” is used as it was awarded.

How Did It Happen:

May we look at this award-winning approach with a fine-toothed comb? Beginning with the origin of this foundation as of 5-17-2000, diversification of the portfolio consisted of approximately 16,000 equities, in 45 countries of the world and invested in 21 different asset classes. Believe it, very close to total diversification. So, as market corrections have happened and the rebounds have occurred, one can observe how rapidly the portfolio grows on rebounds. Most surprisingly is the fact that the portfolio doesn’t correct so drastically on major corrections.

What Is the Most Hidden Secret:

Are there any hidden opportunities to be discovered? You bet! Reduced cost to the foundation. How so? By following the award-winning diversification approach, the foundation eliminates constant daily, weekly, monthly, etc. changes necessary to the portfolio management. Just think how this helps the Board of Directors concerns as well as the investment committee. The asset allocation is structured to follow the market in each asset class, delivering market rates of return for the foundation. Turnover is reduced to a minimum, reducing hidden costs to the portfolio along with reduced investment fees and many other fees, like hired portfolio management fees, etc.

The Nobel Prize helped to set the percentages of asset classes to be held in the portfolio. So, quarterly the portfolio is rebalanced. Note here that selling high happens as well as buying low, as we are told to do.

A little curiosity…consulting a Foundation Coach, analyzing your portfolio to compare it to this approach, could possibly improve the giving back, say, .5%, 1%, 1.5%, 2% or more for your foundation. Holding a portfolio long term, over 15 years or more, you could help many more charitable recipients.

James "Jim" Ross Hollon, CFP, RFC, has been an investment advisor (coach) for over 30 years. Jim's advice to investors is that the past, the present, and the future do not have to be the same. Once you realize this you can change for the better.

In 1981, Jim came to realize that the company he had worked for for twenty- eight plus years had no intention of changing its product portfolio. This no change attitude plus his burning desire to do more for his clients gave him the ammunition he needed to make a change. So at age fifty-seven, he completed the financial planning degree and took an early retirement from his first career to work for himself.

The first thing he would like to convey to his investors is the importance of owning a piece of each asset category of the market and how they can do so. Past performance of each category of the market, good or bad, is not an indicator of future performance. Typically, when one sector of the market
does poorly, that does not mean that all sectors do poorly at the same time. Thus owning a truly diversified portfolio is of paramount importance.
By owning a truly diversified portfolio, investors can reduce the influence of emotion and greed in the investing process. It has been his experience that investors with a truly diversified portfolio worry less than others about the market's ups and downs and have peace of mind regarding their investments that they did not have before.

Jim is passionate about the benefits of diversification as a means to reduce volatility, maximize return, and give clients more confidence about the investing process. These are the reasons behind his motivation and desire to coach.

For more information, contact Vincent Del Franco & Jim Hollon.

Office 602-774-4735 Direct 602-697-4867

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