Raub Brock Capital Management has the experience, skills and resources to offer our clients a wide array of services and solutions to meet their unique needs. Our clients benefit from our collective knowledge and experience. We are not only portfolio managers; we offer comprehensive and integrated financial management services centered on a fiduciary model that requires a detailed and ongoing understanding of our clients. Our investment approach is grounded in thorough planning, utilizing an institutional asset management process applied to each client.

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Portfolio Management Services (detail)

Our Investment Approach

We believe the best way to reduce risk and enhance returns is to construct globally diversified, multi-asset-class portfolios that will harness the wealth-creating power of global capital markets. Each client's customized portfolio is a blend of our core institutional equity strategy and a selection of mutual funds, exchange-traded funds, real estate investment trusts and publicly-traded limited partnerships targeted to achieve portfolio exposure in specific asset classes, such as foreign and emerging market stocks and alternative assets. Our core equity portfolio consists of a concentrated group of high-quality, dividend growth companies. This is based on our belief in the power of rising dividends to drive superior investment performance with lower volatility.

At Raub Brock Capital Management, we manage client portfolios based on the following factors:

Quality. We start our decision making process with an elite group of financially strong companies. In times of increased volatility, investors tend to move toward higher quality equity securities, supporting their prices and making them less volatile than alternative investments. These exceptionally strong companies have proven that they can hold up through tough economic and market conditions with less price volatility.

Dividends Matter. At RBCM, dividends matter – a lot. In fact, in our core equity portfolio we invest only in companies who pay generous dividends, have a track record of consistently raising those dividends, and have every likelihood of continuing to increase dividends. We believe there are five main benefits to investing in companies that grow their dividends:

  • Dividends provide a clear signal of corporate financial health. Dividends enhance earnings transparency of a company and exert a level of financial discipline on management. They also increase corporate accountability and can be a signal of management’s confidence for future growth prospects.
  • Provide a significant source of total return. Dividend paying stocks offer the potential for both capital growth and income. Reinvested dividends have accounted for nearly 50% of equity total return since the 1930s.
  • Lower relative volatility. Dividends have helped buffer portfolio losses when equity prices have declined. Across longer time horizons, dividend paying stocks have produced stronger returns with considerably less risk than non-dividend-yielding securities.
  • Higher returns regardless of interest rate movements. Regardless of how the Federal Reserve alters monetary policy, dividend-paying stocks have historically outpaced their non-dividend paying counterparts.
  • Downside protection during turbulent market cycles. Dividend-paying stocks have outperformed non-dividend payers through both bull and bear markets. This pattern has been even greater for stocks that have grown their dividends over time.

Stocks represent an ownership interest in a business. At RBCM, we view stocks for what they are: an ownership interest in a business led by managers who view us as co-owners. We do not sell a company just because news headlines trumpet a macro-economic or political concern. We do not use market timing tactics. We focus on the business fundamentals that dictate the ability of the company to exhibit a consistent pattern of dividend increases greater than that of the market as a whole and whose business execution should, in Raub Brock's judgment, allow them to continue to raise their dividends.

A Long-Term View. Preservation and steady growth are the cornerstones of our wealth management approach. Benjamin Graham, the great-grandfather of investing and Warren Buffett's mentor, said, "In the short run, the market is a voting machine (influenced by popularity), but in the long run, it is a weighing machine (a measure of value)." Stock prices in the short run may react to world news, rumors, analyst recommendations, forced selling by institutional holders facing redemptions, or speculative buying by momentum-driven investors – none of which have much to do with the underlying ability of the company to continue generating cash flow or its related underlying value. In the long run, however, stock prices track closely with dividend growth, earnings and cash flow.

We begin every investment as if we plan to own it forever. Adopting this attitude directs us toward quality companies who treat us like true owners, and who share their earnings through dividends. Since the stock market takes such a short-term view of investing, it also creates opportunities to purchase some wonderful companies at great prices. When they run into temporary difficulty, as all companies do, the market often lowers the stock prices on quality companies that we know will grow successfully for decades to come. This creates low-risk opportunities to enhance long-term returns for our clients.

Focused Portfolio. Our portfolio typically holds between 20-25 companies. This focused approach has several advantages. The first is that our winners make a real difference in performance. If a stock doubles in a portfolio of 50-100 companies, the impact on performance will be small. While concentration can be double-edged sword, our track record has proven that a properly diversified portfolio with carefully selected companies can result in sound portfolio performance with less volatility than the market. Although our portfolio is relatively concentrated, we rarely own more than two stocks in the same sector or industry.

Low Portfolio Turnover. Our annual turnover averages about 25%, which means that we hold stocks for about four years. This turnover reflects the ongoing process of trimming oversized weights and selling certain stocks in favor of more compelling ones. A 25% turnover in a 20-25 stock portfolio means that we need 4-5 new ideas per year. This allows us to wait patiently for the most attractive opportunities. Furthermore, taxes can be one of the greatest obstacles to building capital, and low turnover produces attractive after-tax returns.

Asset Class Diversification. We believe that globally diversifying investments across multiple asset classes is central to successful investment management. Multiple uncorrelated asset classes and sector diversification help to enhance returns and provide protection. By combining multiple asset classes and sectors, we are able to build portfolios that harness the wealth-creating power of global capital markets while offering downside protection.

What You Get to Keep. Tax inefficiencies and excessive fees detract from client returns. We exercise great care in the appropriate placement of investments within taxable and tax-deferred accounts and continually monitor and review portfolios for tax opportunities in order to mitigate the tax consequences of portfolio management. Excessive expenses also reduce investment returns for clients. Since Raub Brock has no proprietary financial interest in any strategy or investment product, we always select investments for our clients that combine top performance expectations with the lowest possible cost.

Investment Process

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Investment Process

From the client's Investment Policy Statement, Raub Brock Capital Management builds a customized portfolio specific to each client that is separately managed to match the client's objectives.

Customized portfolios are a blend of our core institutional equity strategy and a selection of mutual funds, exchange-traded funds, real estate investment trusts and publicly traded limited partnerships to achieve portfolio exposure in specific asset classes, such as foreign and emerging market stocks and alternative assets.

The defensive portion of our portfolios is invested in mutual funds and exchange-traded funds investing in intermediate term investment grade and government securities. Other fixed income mutual funds and exchange-traded funds investing in areas such as foreign bonds, high-yield bonds and inflation-protected securities may also be used to supplement income or to enhance total returns.

Our disciplined research and analysis is applied across all asset classes, resulting in globally diversified portfolios with favorable risk characteristics.

Our goal is to construct globally diversified, multi-asset-class portfolios that will harness the wealth-creating power of global capital markets.

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Financial Planning Services (detail)

Personalized Planning Services

Our personalized financial planning services provide direction and meaning to your financial decisions. They allow you to understand how each financial decision you make affects other areas of your finances. By viewing each financial decision as part of a whole, you can consider its short- and long-term effects on your goals and prioritize accordingly. You can also adapt more easily to life changes while feeling secure knowing that your goals are on track.

Net Worth/Cash Flow

We examine our clients' current assets and liabilities, along with their income and expenses, in order to assess where they are and their ability to accomplish their financial goals. Proper planning requires more than a snapshot, so we also consider how income and expenses will change over time, factoring in large changes such inheritances, major one-time expenses and salary changes.

Risk Management

Insurance is a critical aspect of any financial plan, as a catastrophic loss to property or from a lawsuit may upend even the best laid financial plans. We work with our clients' insurance agents to determine appropriate levels of coverage for homeowners, auto, liability, disability, long-term care, and life insurance.

Tax Planning

We work with our clients' designated tax professionals to identify any special circumstances that may impact their financial plan. We may also make alterations to their investment mix based on certain tax considerations. Of equal importance, we have extensive experience reviewing tax returns to identify planning opportunities. These may include optimizing passive losses, transacting 1031 exchanges and business sales and investing to account for alternative minimum tax.

We understand how difficult it can be to organize and keep track of all the necessary information that goes into the annual tax return. This is why we maintain a database of such information as interest income, capital gains and losses, cost basis, and withdrawals or contributions to retirement accounts. Each spring, we prepare reports detailing all of this information for our clients and their tax professionals.

Retirement Planning

We help our clients answer the primary financial question people ask us: "Will I be able to maintain my standard of living in retirement?" We prepare retirement projections that provide a year-by-year illustration that allows our clients to see if they are on track to have the kind of retirement they want. We have a sophisticated set of tools we use to analyze how different assumptions on retirement dates, savings rates, lifestyle expectations, longevity expectations, and market conditions can affect our clients' ability to meet their retirement goals. When building these projections, we prefer to use conservative estimates for returns, inflation and longevity. This conservative slant allows us to build retirement plans robust enough to survive extreme market conditions.

Estate Planning

We review estate documents in order to ensure that the directives take advantage of opportunities to reduce estate taxes and that our clients' estates are distributed according to their current goals and objectives. If any changes or additional documents are recommended, we work with our clients' attorneys to implement the changes.

In the event of a death of one of our clients, we help the surviving spouse or other loved ones with the financial aspects of the probate process. Our aim is to minimize the costs and problems associated with preparing final asset statements and to coordinate tax and legal resources as they complete the probate process. We also help with the paperwork and communications required for the transfers of assets. In essence, we understand how distressing these times can be, and we make every effort to reduce the burden on grieving loved ones.

Education Planning

Educating a child is a very valuable and often a costly gift. We help with comprehensive education planning for client children from birth through graduate school. Planning includes areas such as estimating how much to save, how to invest the funds as they accumulate, and how to take advantage of the myriad of tax-advantaged education saving options available today.

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Our Investment Approach

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Interested In Working With RBCM?

To see if our approach is right for you, please review our Disciplined Wealth Process.

The Disciplined Wealth Process is a continuous and dynamic approach to financial management that will help you protect and grow your wealth, achieve your goals, and attain peace of mind.

News & Accolades

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