Q&A

Yes. I am legally bound to act solely in a client’s best interest.

I am an independent fee-only investment advisor who specializes in portfolio management and investment planning for affluent individuals. I spend most of my time monitoring the markets and looking after the financial concerns of my clients. Most of my clients have the primary investment objective of moderate income and growth so the bulk of my time is spent working to help them reach those goals on a consistent basis.

I offer traditional, fee-only asset management and planning services. These services mainly involve ongoing active management of equity and fixed-income portfolios. Note, I also specialize in Buffer ETF strategies designed to provide upside stock market potential with downside protection. In addition, I help coordinate, with the help of my professional contacts, the estate and tax planning needs of my clients. In this way I offer clients all services associated with wealth management.

You would chose me over another advisor based on my experience and competence in advising affluent individuals. If that is what you’re looking for, we might make a good fit. Obviously it would be important for you to like me and to feel comfortable working with me.
Whether or not I’m better than other advisors is not for me to say. I believe I am highly competent in my field and I truly care about my clients. If that’s what you’re looking for in an advisor, then you should consider my services.
I should note that I have found that my approach to managing money appeals to many investors nearing retirement or already retired as opposed to what is traditionally offered by most Wall Street firms and their advisors. I believe a disciplined approach to managing risk in all market environments is more appropriate than a passive buy-and-hold strategy, particularly for investors nearing retirement or already retired. Indeed, a defined strategy to reduce risk in the latter stages of a bull market and increase risk (stock or real estate exposure) during recessions or bear markets when prices are depressed, should allow investors to grow capital with less risk while having some peace of mind. Effective portfolio management should strive to limit market volatility and losses with the ongoing objective of investment returns outpacing inflation and taxes during retirement.

The profile of a typical client is a financially-comfortable retiree or someone nearing retirement. His or her main objective is Moderate Growth & Income. Some of my clients have a high understanding of the financial markets, and some of them have little interest or understanding of the markets. What they have in common, is that they would rather have someone else handle their investments for them. Most of my clients are interested in cash flow and income with some growth potential from their portfolios. They are also interested in having an advisor who focuses on managing risk in all market environments.

If you decide to hire me you would have to indicate at the outset exactly what kind of service you expect. I generally offer to meet with clients on a quarterly basis and communicate with them on a consistent basis either through e-mail, Zoom or by phone. The frequency of our communication will often depend on your financial situation and what type of portfolio management I am providing. Charles Schwab & Co., Inc. would act as your independent custodian. I do not take custody of your assets. I am given Limited Power of Attorney to manage your portfolio based on the guidelines we determine together. You can have online access to view your account and also receive monthly statements from the brokerage firm and quarterly statements from my firm.
All investment securities and cash are the sole property of the client at all times. Again, assets are held at an independent brokerage firm in the name of the client.

$1 million, although this minimum may be reduced in certain situations.

Advisory fees are based on a percentage of assets under management. I am paid on a fee-only basis. I do not receive any commissions or “kickbacks” from third-parties. I offer objective, unbiased advice. My fee is calculated based on the assets under management at the end of each quarter. The typical annual fee is approximately 1.1% of the assets managed and will range from 0.50% to 1.5%.

Yes. In addition to my quarterly management fee, you will also be responsible for paying any commissions or transaction fees to your custodian. And, you will also have to pay any custodial fees, if applicable. Furthermore, if you purchase exchange-traded funds or traditional mutual funds, you will have ongoing management fees payable to the fund management companies. These fees are not invoiced to you, but will come out of the net asset value (price) of the holdings. These fees and any other fees are outlined in each fund’s prospectus. Note, my clients pay me directly so I do try to keep all outside investment costs as low as possible, including commissions and any other applicable management fees. Again, I do not receive any commissions and it is in my best interest also to keep all other costs as low as possible. For example, if I own exchange-traded funds for clients I will try to own the least expensive offerings that still provide the diversification that I am looking for.

Prior to investing, you will fill out a Risk Profile Questionnaire that will help me to better determine your tolerance for risk, investment experience and objectives. After our meeting (or conference call) I will send you a review of your present portfolio with a summary of our meeting(s), along with an Investment Policy Statement for your review. In this review I will make recommendations as to any changes to your portfolio and how I think you should proceed. We may also meet and/or discuss the details for a third time to review the Investment Policy Statement and to address any questions or concerns you may have. If you decide to work with me, Charles Schwab & Co., Inc., will act as your independent custodian.
At the time you open your account with your custodian, you will also sign a Limited Power of Attorney with my firm that allows me to manage your assets either on a discretionary or non-discretionary basis, whichever is more appropriate for your situation.

Charles Schwab & Co., Inc. will act as your independent custodian. You retain ownership of your account at all times and the account remains in your name. Stuart Chaussee & Associates, Inc. simply has trading authority so we can manage the account on your behalf. You will receive monthly statements from the custodian and detailed quarterly reports from our firm.

I have access to your account for trading purposes only. You may also have access to your account by either contacting your custodian or via the online services provided by your custodian. If we have a non-discretionary agreement then I will need your approval before effecting transactions in your accounts. If we work together on a discretionary basis then I will make changes to your accounts without your prior approval, based on your investment objectives and the guidelines determined at the outset. Either way, we will set guidelines and asset allocation objectives at the beginning of our relationship.

I am only able to instruct the custodian to send you money from your account, when you instruct me to do so or if you have signed to give me this permission. Money may be sent payable only to you and only to the address of record on your account. If you want money sent to a third-party or to a different address, you will have to sign for this and give instructions directly to the custodian. This is for your protection. The only withdrawals I can make from your account are for my ongoing quarterly management fees, which are automatically deducted at the end of each quarter.

If, for whatever reason, you decide you would like to discontinue the relationship with Stuart Chaussée & Associates, Inc., you simply need to notify us of your decision. A final invoice will be due based on the number of days the portfolio has been managed in the quarter up until we have been notified of the decision to terminate the advisory relationship. Note, Stuart Chaussée & Associates, Inc. may, at its discretion, also refuse to accept any potential client or discontinue any existing client relationship.

As a fee-only advisor I offer clients unbiased and objective advice. I have no financial incentive to sell any financial products. I always act in the best interests of my clients. I do not receive any commissions.

Your overall asset allocation will depend on several factors: 1) What is your tolerance for risk? 2) What is your financial objective? 3) What is your investment time horizon? And, 4) What are the current risks associated with each potential asset class considered and what is the risk-reward outlook for each asset class? By far the most important questions concern market valuations, your tolerance for risk and your time horizon. The asset allocation policy will be determined before effecting any transactions in your account. The Risk Profile Questionnaire and subsequent Investment Policy Statement, will dictate an appropriate allocation for you, although, depending on your financial situation and tolerance for risk, the allocation may change during our relationship. In addition, if your financial situation or risk tolerance changes, you should notify me immediately.
Furthermore, and importantly, asset allocation will greatly depend on the current valuations and yields of stocks, bonds and real estate investment trusts and the risk-reward available in each asset class. As a bull market ages I will typically try to reduce risk in an effort to protect capital and I will also work to increase exposure during a recession or bear market (when prices are depressed). If we are at extreme valuations (bubble territory) I will normally take a somewhat defensive approach to investing and will focus much more on protecting rather than growing capital.

I believe a better definition of “market timing” is “risk control” and it should be the primary focus of any investment manager or advisor looking to preserve and grow wealth – particularly for investors nearing retirement or already retired. My guess is it has a bad reputation simply because Wall Street firms have tried their best to convince investors/clients that buy-and-hold is in their best interests. But is it really? Wall Street firms want you to stay fully invested in whatever mutual funds or individual securities you own so they can earn ongoing management fees on your assets. If you sell, they may lose mutual fund management fees (you are no longer invested in the fund) and there is also the risk that you will move your cash elsewhere, which means these firms and advisors may lose management fees and potential commissions too. Note, certainly any advisor or money manager who focuses on risk control and isn’t fully invested in stocks will lag the market during a strong bull market and Wall Street firms will often make note of this. But, what you don’t hear much about is the important role that risk control (reducing stock exposure as valuations reach very elevated levels) can play in protecting assets. Again, for investors nearing retirement or already retired, it is my opinion that risk control is more important than simply trying to earn profits.

A typical portfolio is comprised of Buffer ETFs and/or dividend-paying ETFs. A stock portfolio will typically have the objective of moderate growth potential.
In addition, real estate investment trusts may be owned for income and diversification purposes. Real estate is an asset class that investors can use to further diversify that provides plenty of upside growth potential and income too. The easiest way to gain access to real estate, without having to become a property owner outright and manage and maintain buildings, deal with tenants and collect rent, is via real estate investment trusts (REITs). REITs trade like stocks on major exchanges and the sector includes rental real estate, office buildings, malls etc.
For fixed-income securities I generally recommend purchasing investment-grade corporate bonds. Treasuries or municipal bonds (short-, intermediate or long maturities) may also be appropriate. In addition, fixed-income exchange-traded funds may also be purchased.

I’ll advise changing your portfolio’s allocation if your financial situation changes, or if the financial markets warrant making a change. I do not believe successful portfolio management is a static process and for stocks and real estate investment trusts I do not believe buy-and-hold makes sense for investors nearing retirement or already in retirement. The economy and financial trends are constantly evolving and what was once a successful investment strategy or profitable investment may no longer be attractive. I think it’s important to recognize trends in the markets and to try to capitalize on them. I also try to focus on protecting capital and try to control risk as well as possible when assets are priced above long-term trends or historical normal valuation levels. Having said that, I do not like to make portfolio changes too often, and transaction fees and taxes must always be considered beforehand. For example, if I’m purchasing ETFs, REITs or bonds for a client, I typically do so with a 3 to 5 year time horizon. Note, if Buffer ETFs are purchased the time horizon will be at least 1 year. However, there are many valid reasons for selling investments and, again, I do not believe in buy-and-hold “forever.” At some point nearly every asset can be overvalued, most certainly during asset bubbles. So, again, portfolio management is a dynamic process and I am not a passive investment manager.
On the fixed-income side, individual bonds are usually purchased with the idea of holding them to maturity, although in certain circumstances they may be sold prior to maturity (e.g. tender offer, tax-loss selling, downgrade below investment grade).
Changes in a portfolio, which may be somewhat frequent depending on the volatility and valuations of the market, are always made with the client’s best interests in mind.

Much will depend on current valuations of the overall market, the length of the bull market trend, overall sentiment readings and whether dividend yields and attractive valuations are available in different sectors of the market. It is important to recognize that in a downtrend (correction or bear market), approximately 75% of the total stock market will decline at the same time and price action is highly correlated. It is extremely difficult to make money or preserve wealth in a bear market while retaining stock exposure, regardless of how conservative the holdings might be. So, typically, if I anticipate a bear market or severe correction and asset prices are very elevated relative to historical valuations, I will usually raise cash and/or increase bond allocations by selling stocks. If Buffer ETFs are owned they may provide adequate protection and can be held long term.

Yes. Fixed-income portfolio management is a less dynamic process than managing a stock or REIT portfolio. There will be times when you have principal returned to you and this money must be reinvested in other bonds. And, we will occasionally perform bond swaps for tax purposes. Bond ladders are typically constructed for clients seeking Moderate Income and as bonds mature the proceeds are either reinvested out to later maturities or used for income needs. Bond ETFs are also often purchased for the fixed income portion of a portfolio but typically with a 3 to 5 year time horizon. Yes, the market may change or more attractive investment options may become available so they may be held for shorter periods, but again, generally speaking, fixed-income management is a much more passive approach than managing stocks and real estate investment trusts.

Typically we will meet to fill out the account opening paperwork with the brokerage firm that will custody your assets and to review and sign the advisory agreement with Stuart Chaussee & Associates, Inc. You will also have received a copy of ADV Form II for your review. A Risk-Profile Questionnaire is filled out and an Investment Policy Statement is prepared to review and sign by the client and the advisor. If assets are being transferred in from another brokerage firm, this process can usually take up to two weeks. In short, we help facilitate the efficient transfer of funds to your new accounts and will keep you informed during the process.

This will depend on you. I offer to meet clients on a regular basis and often do so quarterly. I often communicate with clients either by phone, Zoom or e-mail and typically will send Market Updates by e-mail every month. Client meetings are usually scheduled at their office or home for their convenience.

Yes, to some degree. You will receive all relevant tax information from the custodian each year for your tax preparation. In addition, I will do my best to manage your portfolio with tax efficiency in mind at all times and I am available to discuss your tax situation. Note, I do not provide tax advice, so to speak, but if your questions are general or pertain to investment management, I can usually help. Regarding estate planning, I have a decent background in estate planning issues simply from assisting clients for many years and discussing their situations with both their tax and estate planners. But again, I do not provide advice in either estate planning or tax planning. I will refer you to a qualified estate planning attorney or tax professional if you have specific questions about your situation and I will normally work with your estate and/or tax planning professional to help make sure all aspects of your wealth management are considered together.

I provide clients with detailed portfolio statements on a quarterly basis. My statements should be reviewed along with the monthly statements provided by your custodian.

Yes.