Fee-based Austin Financial Asset Managers – Aligning Our Goals to Yours


March 21, 2017

Austin, Texas is hot, both literally and figuratively. By now, you have probably seen it on some “best” lists. Forbes recently named it the #1 “next biggest boom town in the U.S.”  Already the 11th largest city in the U.S., the capital city is rapidly expanding.  As residents and fee-based Austin asset managers, we are always hearing different totals of people moving to the city.  Reports of 100 a day… 150 a day… everyone seems to be coming here!

And it is no wonder. Austin has an average 228 days of sunshine a year.  City residents benefit from a well-run government, no state income tax (though property taxes may be high, depending on where you live), and excellent schools.

Outdoor activities abound. Beautiful Lady Bird Lake is a local favorite place to jog, bike, walk the dog, or just people-watch. When the weather is right, hundreds of kayaks and stand-up paddleboards surface on the downtown stretch of the lake. Nearby Zilker Park teems with throngs of soccer players, Frisbee golfers, kite flyers, and just about any other variety of park enthusiast you can think of.  When you are ready to cool down, head down the hill to Barton Springs Pool. This three-acre, natural spring-fed pool maintains a brisk 68-70 degree temperature year round, is home to the endangered Barton Springs Salamander, and is just all around fun.

It may not be news to you that Austin is home to innumerable outdoor gems, craft brews and BBQ joints, along with some of the hottest live music festivals and venues. But you may not have known that the city is also home to the #1 ranked investment newsletter, The Prudent Speculator*. Barrons recently called it the “little newsletter that crushed the market.”[1]

While The Prudent Speculator’s roots are in California, the newsletter’s parent company and owner, AFAM Capital, moved its headquarters to business-friendly Austin nearly a decade ago. A fee-based Austin asset manager, AFAM Capital is known for proprietary mutual funds, the aforementioned newsletter, as well as managed accounts for wealthy individuals. Fee-based Austin asset managers are many, but few have a 40-year legacy like The Prudent Speculator.

We believe that the benefit of fee-based asset managers lies in our interests aligning with yours. For example, fee-based asset managers might have a tiered fee structure like this:

$100,000-$500,000: 1.5%

$500,000-$1M: 1.25%

$1M-$5M: 1%

$5M+: 0.75%

Simply stated, we are incentivized to do our best to grow your account.

AFAM Capital, a fee-based asset manager, is quite different than the owners of those renowned Austin BBQ joints. While we are completely transparent in how we structure costs, they wouldn’t dare share the recipes to their famous sauces!

The Case for Value Investing

We believe that you pre-pay for expectations in growth stocks, whereas value stocks have already been discounted. This is why over the long-term, growth stocks have trailed value stocks, returning an annualized average of 9.4% while value stocks have returned an annualized average of 13.6% over the same time period.

Download The Case for Value Investing

Investing involves risk, principal loss is possible, and there can be no assurance that investment objectives will be achieved.

Nothing presented herein is, or is intended to constitute, investment advice, nor sales material, and no investment decision should be made based on any information provided herein. The information provided herein is educational in nature, is not individualized, and is not intended to serve as the primary basis for your retirement, investment, or tax-planning decisions.

The newsletter average performance of The Prudent Speculator has been the #1 ranked (of 13 newsletter averages), not adjusted for risk, investment newsletter since inception, according to Mark Hulbert and The Hulbert Financial Digest as of 2/28/17. More information can be found at http://hulbertratings.com/methodology.

Austin is best experienced with air conditioning and sunscreen.

099-AFAM-3/17/2017

[1] https://www.afamcapital.com/print-online/little-newsletter-that-crushed-the-market/

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