On Friday, August 15th, our team met in St. Louis to attend a Habitat for Humanity build at 12128 Trampe Heights Lane. We extend our thanks to a friend of the firm, John Castagno, for the invitation and also for serving as house leader during our build. We enjoyed the opportunity to learn some new skills, and we were proud to further Habitat’s efforts to create housing for someone in need.

Habitat For Humanity St. Louis is an impressive organization with over 350 homes in the St. Louis area. Everything in the process is guided by thoughtful planning—from thoroughly vetting homeowners to energy-efficient designs that make living in their homes more affordable. Visit their website to learn more about Habitat’s work.

Recall from last month that Hill Investment Group has a defined process to introduce prospective clients to our firm and take them through the first 45 days as a new client. We call it The LongView Process. Last month I discussed Stage 1: Discovery, and now I’ll dig into Stage 2: Planning.

PLANNING
The Planning meeting begins with a review of everything that we captured in Discovery. Since then, we’ve translated your life into a Family Profile Map that categorizes everything with specific topic areas: goals, family, financials, etc. Once we’ve agreed that we have an accurate understanding of your family and finances, our team then walks through an outline of the transition, new allocation, and other improvements to be made.

One of the key topics you’ll understand clearly after the Planning meeting is what makes our philosophy on investing so different. We strive for after-tax, risk-adjusted, global market returns that few people actually get. Let’s pick that last sentence apart.

• “After-tax” returns are most important because we all pay taxes. No one can pay tuition or retire on pre-tax income. Our approach is highly sensitive to taxes.
• “Risk adjusted” means that we design a portfolio that reflects your willingness, ability, and need to take investment risk. We will do this by coupling your intangible desire to meet your goals with detailed modeling to paint a picture of potential outcomes…not just a single number.
• “Global” means that the typical equity portion of our portfolios reaches worldwide with approximately 12,000 underlying equities in the United States, Europe, Asia, and Emerging Markets.
• “Market Returns” means that your portfolio is designed to reflect the market with a tilt to value and small securities. We are not trying to beat the market. Rather, we are trying to build a portfolio that emphasizes those persistent and robust factors as identified in academic journals—those that have shown to outperform a typical market index like the S&P 500 over long periods of time (10, 20, 30+ years).
• “That few people actually get” means working with Hill will help you close The Behavior Gap. Simply put, individual investors tend to significantly underperform the market over time because of poor behavior. Driven by fear, they sell at market bottoms and subsequently (driven by greed) buy back into the market at its high—the exact opposite of what defines long-term investment success.

The takeaways are 1.) a clear understanding of your before & after, 2.) a well-documented summary of your personal and financial circumstances, and 3.) a deeper understanding of what makes our approach different. With these in hand, you are well situated to decide whether we’re the perfect fit.

Click here to read a detailed summary of the entire process.

As our summer internship with Baylor undergrad, Matt Brugner, came to a close, we asked Matt to share his perspective on the experience.

What surprises did you encounter during your time as our intern?

I did not expect the team to be so receptive and willing to take time out of their days just to teach me. I never felt excluded, which made waking up to go to work all the more exciting.

What was the highlight of your experience?

When I spent time one-on-one with each member of the team. We would sit for an hour and talk about everything from career advice, to investment philosophy basics, to what allocation I should use when saving for an engagement ring. I enjoyed these personalized sessions because everyone sacrificed valuable time to help me improve. During one of these sessions, Rick ran a Monte Carlo simulation with projections for my own retirement (I’d better start saving now).

What kind of job do you think you’ll pursue after college?

This internship reaffirmed my dream to start my own company or work for a small, young firm. I think I will thrive in that environment. I want the ability to make my own decisions and see a company go from nothing to something.

I loved the team/family environment at Hill Investment Group. Everyone cares for one another and for the long-term success of the firm. No one here is clocking in and out just to get a paycheck. I hope for the same in whatever career I find after college.

Any thoughts to summarize the experience?

Professionally, I think I understand more about what it takes to be successful in the real world. You have to be a hard worker and willing to sacrifice to get things done. At the same time, you have to be an idea generator and a forward thinker to have a long-term impact on a firm. You also have to know what is most important in life and how to balance that with your work. I had to actively carve out time with my family and friends, a luxury I take for granted in college.

Also, I think differently about financial services. I wanted to find a field that was more about helping others than earning the biggest commissions. I thought that didn’t really exist, but I was definitely wrong.