Investment Management

When it comes to investment management at Nikulski Financial, Inc. we emphasize continuous and regular account supervision based on our firm’s Investment Strategy. Our Investment Strategy is risk-based and incorporates clients' risk tolerance, income needs, and financial goals primarily using individual stocks, bonds, and exchange-traded funds (ETFs).   We do not generally utilize mutual funds.  

A Risk Tolerance Questionnaire is completed to determine which portfolio is most appropriate.  An Investment Policy Statement (IPS) defines the portfolio’s allocation and is used to put parameters on the portfolio.

Once the appropriate portfolio has been determined, we review the portfolio and if necessary, rebalance the portfolio based upon your individual needs, stated goals, and objectives. Each client can place reasonable restrictions on the types of investments to be held in the portfolio.

How does Nikulski Financial, Inc., approach managing client portfolios?

It all starts with identifying a client’s risk tolerance. We use a software tool called Nitrogen that helps a client identify a level of risk that is appropriate for them and their specific situation. The output from Nitrogen is then used to create a portfolio that aligns with a client’s risk tolerance. 

Is there an overall investment philosophy at Nikulski Financial, Inc.?

Yes. We believe the best approach for our client’s portfolios is within a core-satellite investment structure. This means that the majority of a client’s assets are within one of three “core” risk-based portfolios: Moderately Conservative, Moderate, and Moderately Aggressive.

The remainder of a client’s portfolio is then invested among “satellite” holdings, where we look to assume a tactical strategy to take advantage of opportunities within the market.

Does it make sense to time markets? 

Over the long-run, research has shown that most of the time, trying to time markets does not work. Rather, creating a well-thought-out investment plan in accordance with your risk capacity and risk tolerance, investment objectives, and goals are keys to long-term success. 

When it comes to timing the markets, it’s not just about when to get out or in; it’s about when to get out AND back in.

What type of investments should the portfolio include? 

Almost all decisions around portfolio construction come back to a client’s risk tolerance level and security selection is certainly one of those decisions. The lower the level of risk tolerance within a client portfolio, the more diversified, fund-like investments we will choose. The higher the risk tolerance, the more the portfolio has room to take a concentrated risk in individual stocks and bonds.

At an appropriate portfolio level, non-traditional investments will be used, including third-party managers and alternative investments. 

Should I use mutual funds, exchange-traded funds, or individual stocks & bonds? 

Here at Nikulski Financial, Inc.,  we prefer to use equity & fixed-income exchange-traded funds (“ETFs”), individual stocks, and individual bonds. These types of investments are liquid (you can sell them whenever the market is open), low-cost, tax-efficient, and widely available which allows us to work with clients of all levels of risk and establish an efficient portfolio. 
Does Nikulski Financial, Inc. have any online tools for me to use? 

Absolutely! We have a few key tools that we provide all clients to have access to their accounts. The first is Schwab Alliance. Charles Schwab & Co. is our chosen custodial partner and they have a simple and easy-to-navigate site to see all of the activity occurring with a client’s portfolio. 

Secondly, we partner with eMoney as our Financial Planning software of choice. We use eMoney in the development & maintenance of our client's financial plans.  Our partnership with them also allows for all our clients to have access to a personal financial website which allows clients to have a bird’s eye view of their entire financial picture (not just investment accounts) as well as a secure document vault.