PT Portfolios

The investment industry was changed forever when the deregulation of brokerage commissions led to the creation of Discount Brokers. In addition to offering Much Lower Fees and Commissions these new firms let individual investors hold No-Load Mutual Funds from Different Fund Families and Exchange Traded Funds (ETF’S) in one Consolidated Brokerage Account.

Fund investments are Completely Liquid have Full Disclosure of their Expenses and Performance over different time periods and can be Much Less Volatile than individual stock positions. Funds make it easy to effectively Diversify retirement, trust, and custodial portfolios of any size and invest into markets and specific sectors worldwide with No Minimum Investment and Very Low Expenses. Over the years No-Load Funds and ETF’s have become by far the most popular investments for individual investors conservative, long-term portfolios.

Since managing portfolios and reporting to investors is a full-time job investment firms typically want their salespeople to Hand-Off Management to Third Party Managed Accounts (TPMA’s) and spend their time prospecting for new accounts not working for their current investors to manage individual portfolios.

TPMA’s add another Layer of Expenses on top of the broker/planner’s fee and since they are typically pooled accounts the investor can’t talk directly to the portfolio manager if they have questions or want to change their Growth to Income allocation. Handing off portfolio management is Much Easier and Very Profitable for the Salesperson and Their Firm but PTI has never seen any evidence these expensive accounts have better long-term returns, after expenses, than the low cost, fully disclosed PT Portfolios investment strategy.

If brokers, financial planners and insurance salespeople were not Paid Much More and didn’t have Pressure from their firm to Increase Sales and Fees every year, what would they recommend to their Family and Friends for their Long-Term retirement, trust and other conservative investments?

PTI believes the answer would be Diversified portfolios of low cost No-Load and Exchange Traded Funds.

Every fund manager no doubt believes that they have the very best strategy to pick individual stocks or bonds, but the facts show that there are always funds that consistently outperform their competition. To find these select funds PTI works with Morningstar Inc., Captools Inc. and TD Ameritrade Institutional/Charles Schwab to track and rank Over 2000 funds every month in 49 Sectors of the worldwide securities markets.

Every month each fund is compared to all other stock or bond funds and graded based on the funds actual Performance over different time periods, Annual Operating Expense, and the funds Cash Dividend. These individual grades are combined into one overall PT Grade of Zero to 100. The grading process is not proprietary and PTI is happy to show any interested investor exactly how PT Grades are calculated and updated each month.

PTI believes that investors should know How Their Investments Are Selected, How They Perform compared to their competition and Why They Are Sold. PT Portfolios are diversified and managed going forward based solely on the changes in these grades. All PT Grades are updated and fully disclosed to investors in their Monthly Updates described in the following After Investing section.

Past Performance Does Not Predict Future Results, but it can show how a fund has performed in different economic conditions. Obviously, no one knows if currently strong funds will continue to deliver superior returns, but PTI believes that it makes sense to build diversified portfolios with investments that have Low Expenses, Higher Dividends, and a long-term record of Better Performance over many time periods compared to other funds in their sector. Then, After Investing, to manage the portfolio with Ongoing Performance Tracking Research.

Please review the current facts in the following Performance Gaps section to see how big the differences can be for funds in the Same Market Sector over the Same Time Period.

The fact that stocks and bonds can be traded every day is a big advantage compared to other growth investments in Real Estate, Art, Private Equity, Annuities, Collectables, or Limited Partnerships but this Instant Liquidity can lead to Volatile Markets that can concern any investor. However, over time markets have always recovered to new highs. After Black Monday in 1987 when the Dow Industrials were down Over 22% In One Day the average was up 27 of the next 35 Years. Over the last 100 Years in spite of recessions, wars, and all types of economic and political problems the Dow Was Up In 69 Years and the gains in the up years were Over 700% more than the declines in the down years.

PT Portfolios avoid the risk of owning individual stocks and offer investors a Conservative, Unbiased, Fully Disclosed, Low-Cost way to benefit from the potential long-term growth of the worldwide securities markets.

Many investors in PT Portfolios also own individual stocks or bonds they select and manage themselves. These investors shouldn’t need to have two accounts with exactly the same registration. PT Portfolios are unique from other investment firms because both self-directed and managed fund positions can be held in the same consolidated Discount Brokerage Account.

Risk Tolerance
PT Portfolios are designed to provide conservative Growth and Income over time. No advisor can predict the Short-Term Swings in the securities markets so funds that will be needed within a year should be invested in liquid, short term income funds or the money market.

Growth Funds that invest into a wide range of individual companies can be much less volatile than individual stock positions, but they can be more volatile than Income Funds that invest into shorter-term bonds. Since every investors tolerance for fluctuations in the securities markets is different and can change over time PTI can’t appropriately diversify portfolios without input from the investor. This is why every investor receives a Monthly PT Update, for each account, in addition to their brokerage statements. These updates show the accounts diversification and the performance of each position.

Unlike the TPMA’s sold by most brokers, insurance and financial planning firms PT Portfolios are Individually Managed so an investor can request changes in their investment allocations at any time. They can reduce market risk by requesting that a Fixed Minimum Percent of their account be invested in Shorter-Term Bond Funds or the Money Market. For more opportunity for growth over time they can request that Growth and Balanced Funds make up at least a Fixed Minimum Percent of a portfolio.

Without any Fixed Minimum Allocation Instructions PT Portfolios will be broadly diversified and managed based on changes in each fund’s combined PT Grade.