Rebalance manages your investments with some of the lowest fees in the industry. In fact, we can save you on average 68% in annual fees. Because of the miracle of compounding (see below) even small reductions in fees can make a big difference in the size of your nest egg.
When you invest money into any fund that provides a rate of return, your money grows by that rate. But that rate not only applies to the original amount invested, but also to the amount your money has grown because of it. So the more it compounds, the more you have. The more you have, the more it compounds. It’s a beautiful cycle—one that can actually increase your investment returns eightfold over 30 years. That’s why it’s often called the “miracle of compounding.” But it’s not really a miracle, it’s just math.
Unfortunately, interest isn’t the only thing that compounds over time. Fees compound too. Think about it. Just as adding money to your investments can quickly grow your total savings, money that is removed from your savings — by annual fees for example — will compound over time and end up dramatically eating away at your savings. Even a seemingly small annual fee such as 1.49%, the average U.S. advisory fee + average U.S. mutual fund fee, can take away almost 30% of your investment return when compounded over 10 years. We know. It’s shocking.
Naturally, most advisors and brokers are in no hurry to advertise the total fees that you will pay. The fees are either briefly mentioned in passing or buried away in the fine print. At Rebalance, there is no fine print. We will always prominently advertise and clearly communicate our fees — all of them. Why wouldn’t we? Considerably lower than most of the competition, our fee structure is one of our best features.
At Rebalance, our investment methodology is based on a process called passive investing. And while the details are complex, the overall idea is simple. The safest, most reliable way to ensure good returns over time is to try to match the market returns — through low-cost index funds — rather than attempting to beat the market. Passive investing has decades of research to prove that it works. By whom, you ask? By members of Rebalance’s Investment Committee.
You might know them already. Highly respected in the financial world, Burt Malkiel, Charley Ellis, Jay Vivian, and Kristi Craig believe passionately that people should invest safely and securely using the low-cost, passive investing methodology that they helped to perfect.
Every Rebalance client account is a collection of globally diversified ETF funds selected to work together as a balanced whole and provide higher, more stable returns over time. Forty years of research has shown that this type of balanced, diversified investing helps reduce risk and improve returns.
For instance, during the turbulent period from 2000 to 2010, an investment in a seemingly diversified broad stock index such as the S&P 500 generated a return of 1.4% per year. That same money invested into a truly diversified portfolio returned 8.3% per year!
Many investors, however, believe that “diversification” perhaps means owning more than 10 stocks, or maybe buying bonds on the side. Years of research has demonstrated that true diversification in a portfolio looks like the world: U.S. stocks, foreign stocks, real estate, bonds, and small company stocks.
Rebalance portfolios are built with exchange-traded funds (ETFs). ETFs are similar to mutual funds, but they are significantly less expensive to own. The average actively-managed mutual fund charges an annual fee of 1.27%, while the average ETF charges just 0.2%. That’s because ETFs are index-based funds, meaning they are designed for passive investing and not active management. So you aren’t paying for someone to gamble with your money, trying to beat the market — which is a good thing because study after study shows that most actively managed funds underperform the market. Why pay more for worse performance?
As a client, the investment categories in your Rebalance portfolio have been customized to match your investment profile. Because markets are cyclical and rise and fall, over time your portfolio is likely to drift from this target. Periodic rebalancing ensures that your investment account is kept balanced and on target in a disciplined, low-cost, programmatic way. More importantly, research has shown that disciplined rebalancing can reduce risk and, in some circumstances, increase returns.
“We all wish that we had a little genie who could reliably tell us to ‘buy low and sell high.’ Systematic rebalancing is the closest analogue we have.”
Burton G. Malkiel
A Random Walk Down Wall Street, 10th edition.
Copyright 2011
Most investment funds are managed by people who are gambling with your money — by betting on how a stock will perform at any given time. In the investment industry, it’s called “stock picking” or “market timing,” but don’t let the names fool you. It is a bet.
Instead of speculating with your savings, we manage them using a proven, data-driven approach to investing. Extensive research shows that investors should not try to beat the market return by picking individual stocks. Rather, they should attempt to match the market by investing in special funds — called index funds — that are designed to match the return of the market they represent. Combine low-cost index funds with a globally-diversified portfolio, and you have a proven recipe for success. It’s called passive investing and our investment committee helped establish the concept more than forty years ago.
When you are over 45, you have probably realized that your life is a bit more complicated than it used to be. Multiple investment accounts from past employers, mortgages, and the myriad of other financial details of a well-seasoned life makes effective investing complex and intimidating.
That’s why Rebalance pairs each and every one of our clients with a seasoned investment advisor and a highly qualified service representative. They’re your own personal finance team, monitoring your money and your situation, ensuring that you are always on track to achieve your financial goals. They are there for you every step of the way for as long as you are a member of the Rebalance family—handling the complexities of the investment landscape, keeping you informed, and ultimately giving you peace of mind. It’s a five-star approach used by elite wealth management firms for their institutional and high-wealth clients, and for good reason. It works—providing highly personalized advice and service that ensures your money is managed safely, effectively, and most of all personally.
At Rebalance, our client relationships are very much like our investments: stable, dependable, valuable, and long-term. When you start a Rebalance account with us, you also start a relationship with someone who will be with you every step of the way. You will have the same advisor as long as you are a member of the Rebalance family. We will monitor your investments, take care of the details, keep an eye on the big picture, and constantly look out for you.
From timely reminders to annual checkups, expect to hear from us regularly, even if it’s just to see how your kids are doing.
Investing is challenging. The stakes are high and the repercussions of a misstep may not be evident for years to come. You need your money to grow enough to sustain you and your family through life and into retirement. Large investment firms, however, need their profits to grow. It’s an inherently conflicted system that, more often than not, raises the question of whose best interest is being served.
Rebalance has been, and always will be, independent. We are unencumbered by corporate ownership and serve only one customer – you. Being a Registered Investment Advisor (RIA) means that we are legally compelled to put your interests ahead of our own. (We, of course, would do so anyway, but it’s important to know nonetheless.) Brokers do not operate under this standard. They get paid commissions to sell you products and increase their corporation’s profits.
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