Investments

Strength comes with discipline

DAI offers personalized, integrated investment strategies and management to individuals and families of significant wealth. We understand that our clients face unique challenges and situations as they continue to build their wealth and form their legacies. At DAI, we are focused on helping to manage and mitigate those opportunities and challenges with more than the traditional investment solutions. We take a disciplined approach to each phase of our client relationships. It starts with building trust through taking the time to have a deep understanding of our clients’ needs and desires. This allows us to bring fresh ideas forward and put our extensive knowledge to work implementing a strong, comprehensive strategy in growing, preserving and protecting our clients’ wealth.

Over the course of more than two decades, DAI has researched the markets with passion and energy. The result is a careful and effective methodology and system that strives to capture the opportunities embedded within the market so that we can act when appropriate. We take asset and wealth management extremely seriously and understand the great responsibility our clients have placed with us. Our clients trust us to assess and determine the risks, provide clarity, construct an appropriate portfolio and look to future opportunities to meet and exceed their needs.

DAI’s Triple Discipline System

DAI Triple Discipline System

Through extensive research, DAI has developed an investment management system that strives to remove human emotion from decision making. It is based on three key disciplines which we use for our clients. And we strive to never violate these three disciplines.

Discipline 1 – Holding Periods

Discipline 2 – Inverse Correlation

Discipline 3 – Rebalancing

DAI works to add value to the management of your investments by employing these three disciplines and minimizing the emotional element in the wealth management process. This same disciplined approach makes it possible to manage accounts during the wealth accumulation stage as well as the income withdrawal phase of our clients’ portfolios. By allowing us to strategically reduce the number of shares sold to produce retirement cash-flows, our system adds to the long-term growth potential of your portfolio, maximizing the amount of income you can withdraw without diminishing principal.

We welcome the opportunity to tell you more about the Triple Discipline System. Contact Us

 

Alternative Investments

For our clients of high net worth, the expanding array of vehicles for non-traditional, alternative investing offers attractive opportunities for diversification. From real estate and commodities to hedge funds and private equity, DAI is diligent about helping clients build a portfolio of individually appropriate assets and strategies that is right for them.

Our Chief Due Diligence Officer is constantly reviewing and analyzing products that may be appropriate for our clients and their individual needs and circumstance.

1031 Exchanges

A 1031 Exchange is one of the most powerful tax deferral strategies still remaining for accredited investors. Taxpayers often want to avoid paying income taxes on the sale of property if they intend to reinvest the proceeds in similar or like-kind property. A 1031 Exchange offers an opportunity to sell property and replace it with an income generating property using 100% of the sale proceeds while deferring some or all of the taxes on the transaction.

For example, farm land can be exchanged for an apartment complex, a rental vacation home, office or other commercial property or any type of property that is held for investment. The range of real property that will qualify for tax deferral opens up many options for land owners such as farmers to diversify their investments and obtain cash flow without having to be involved in the management of the acquired replacement property. The dividends paid by the investment may provide a substantial income for as long as they own the property. Often times this may result in more than what they would receive in land rent.

Important Facts

  1. Taxes from the sale of farmland or other real property may be deferred when the proceeds are used to purchase “Like Kind” property.
  2. All proceeds from the sale must be handled by a “qualified intermediary” (QI) and cannot be received by the seller or his/her agents. The entire cash proceeds from the original sale, not reinvested into Like Kind property, will likely be subject to capital gains. The investor often has discretion over how much tax they have to pay.
  3. It is important to know the TWO TIMELINES you need to abide by–The Identification Period (45 days from date of closing). The Exchange Period (180 days from date of closing).
  4. The replacement property must be subject to an equal or greater level of debt than the property sold or as a result the buyer could be forced to pay tax on the percentage difference.

At Discipline Advisors, we find available investments that qualify to be used in 1031 Exchanges and can help you choose the appropriate investments based on your specific debt requirement needs and desired income.

DAI does not give tax advice but we work with your CPA and attorney, along with our Broker-Dealer, Lewis Financial Group, to help you determine and understand the options available to you. We can also recommend the qualified intermediary which satisfies IRS requirements to make the exchange process as quick and simple as possible.

There are material risks associated with investing in real estate properties. These include, but are not limited to, tenant vacancies; declining market values; potential loss of entire investment principal; that past performance and diversification do not guarantee future results; that potential cash flow, potential returns, and potential appreciation are not guaranteed in any way; adverse tax consequences and that real estate is typically an illiquid investment. Because investor situations and objectives vary, this information is not intended to indicate suitability for any particular investor. This material is not intended as tax or legal advice. Please speak with your attorney and CPA prior to considering an investment.

Retirement Planning and Income

Many retirees need to draw income out of their portfolios. They often simultaneously sell both equities as well as fixed income securities without consideration of the impact on their portfolios. Yet in a down stock market, a greater number of equity shares must be sold to achieve the same amount of monthly income. A share that no longer exists in your portfolio never has the ability to regain value once the market rebounds. Few retirees realize that those additional shares sold permanently may reduce the average rate of return of the portfolio because markets fluctuate.

We believe that the income withdrawal phase of a portfolio should be managed differently than the accumulation phase. During the accumulation phase, the order in which you receive particular year-to-year returns may have less impact on the resulting growth. However, during the income withdrawal phase, the order in which you achieve particular returns–say 5% one year and 12% the next, or vice versa–can substantially affect the value of your portfolio.

Using our Triple Discipline System, we strive to significantly and strategically reduce the number of equity shares sold to help produce retirement cash flow. As a result, we often are able to maintain the long-term growth potential of our clients’ portfolios while attempting to maximize the amount of income they can withdraw.