Hunter Satterfield, Partner and Chief Investment Officer at Cain Watters & Associates joined Julie Cooling, Founder and CEO of RIA Channel, at the CAIS Alternative Investment Summit to discuss the five boxes of successful investing.
Cain Watters & Associates started as a CPA firm that later developed an RIA. That combination naturally leads to a technical and rational approach to investments. Satterfield notes that investments will work out fine if five boxes are checked. The first focus is on asset allocation, making sure that clients have diversified portfolios that match their needs for risk, return, and liquidity. Asset location is another key to investing, making sure that vehicles are in the best possible account types for maximizing after-tax returns. It is imperative to have a rebalancing process that returns client portfolios regularly to the desired asset allocation. Cain Watters works with investors and advisors on controlling behaviors, such as avoiding the temptation to stray from the long-term asset allocation in times of market stress. Finally, the firm seeks to reduce frictions, such as fees.
The firm works to provide a variety of investment options for clients, including direct indexing, separately managed accounts (SMAs), as well as access to external managers. Cain Watters works with CAIS and appreciates their ability to offer simple and streamlined access to alternative investments. Many clients are adding alternatives to their portfolios, while the firm is hearing more about 50-30-20 portfolios that invest 50% in equities, 30% in cash and fixed income, and 20% in alternative investments. The firm seeks to be flexible, now offering cash management solutions for clients at today’s higher yields. As the market environment changes, clients are taking advantage of opportunities in distressed real estate and private credit.
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