OLA Investment Committee GoToMeeting 1/22/16 - Connected Wealth Solutions presentation
Members attending:
Stuart Levy – Portland Public Schools
Lori Wamsley – Lane community College
Suzanne Sager – Portland State University
Dan White – Scappoose Public Library
Stephanie Lind – Washington County Cooperative Library Services
Shirley Roberts – OLA Association Manager
Connected Wealth Solutions, LLC (An independent member of the BAM Alliance) - Brent Gunderson, Financial Advisor
Notes:
Brent provided a PowerPoint presentation about Connected Wealth Solution’s values and approach to investment services. Then he explained his Proposed Portfolio Allocation for OLA.
Lori asked what the frequency of rebalancing (to maintain portfolio at 30/70 equity to fixed income allocations) would typically be. Rebalancing would generally be done with income off investments or with new funds and would typically only happen about twice per year. Shirley stated that we’ve been advised to keep about $50,000 in our checking account. If in August at the end of our fiscal year we have more than 50,000 in our checking account we could consider investing the surplus and that could be used for rebalancing purposes.
Brent recommended that with a 5 to 7 your investment timeframe no more than 30% of the invested funds should be in equity, the balance in fixed income (bonds….).
Brent”s proposal includes investments in Dimensional Fund Advisors (DFA) funds. DFA is one of the largest investment companies in the world. Most people have not heard of them because they only sell through financial advisors who have gone to their training program. Brokers are not allowed to sell. They use an evidence-based philosophy similar to Connected Wealth Solution’s philosophy.
The OLA board has expressed interest in some of our money being invested in socially responsible funds. Brent stated that Connected Wealth Solutions usually don’t recommend socially responsible investment profiles. However, he looked at DFA’s socially responsible funds and found that they performed very well. He said that there was less than .5% difference between socially and non-socially responsible investment earnings. So, he included socially responsible funds in the OLA portfolio proposal.
Shirley shared that the OLA board discussed the possibility of investing the $25,000 scholarship account funds In the Oregon Community Foundation. The board decided against that option because they would lose control of the funds. There is an OLA committee currently discussing how to handle scholarship funds. In the meantime Shirley would like to come up with a short-term option for investing those funds that would gain more than the current $.63 per month. One long-term option Brent offered would be to invest the funds in equity and fund scholarships off the earnings. Funds could be rebalanced within a global bond that covers the rebalancing fees.
Fidelity is the investment company that Connected Wealth Solutions uses. The average cost per trade is $20. Brent predicts no more than about $200 worth of trades per year with the proposal he presented, as rebalancing will be done once or twice a year. Their management fee is 1.25% and very competitive according to Brent.
Shirley asked Brent if it was worth waiting a while for the market to bottom out before starting our investment. Brent reiterated his company’s philosophy of not worrying about buying and selling based on where the market is currently, but rather rather thinking in a longer-term fashion.
The OASL $125,000 CD with Wells Fargo is making about $60 every three months.
The investment committee will meet again on Monday, January 25 at 9 AM via GoToMeeting. The group will discuss the investment proposal and craft a recommendation for the OLA board to consider at their meeting on February 5th.