INVESTMENT PROCESS

Once someone has engaged the services of Northside, our first task is to gather information about that client, any current portfolios, detailed financial goals, expected present and future income needs, tax status, estate provisions and other pertinent information. The principals then create a personalized Statement of Investment Objectives and Policies (SIOP).

The SIOP is the foundation upon which Northside will design that client's portfolio. It will outline risk profile, time horizons, target asset allocation, and performance standards. It will also outline the frequency and timing of formal communication between Northside and the client. The SIOP is a work in progress. It can, and will, change as the client's situation changes.

If the client has not already done so, Northside will help select a provider for asset custody and safekeeping services. Although Northside will direct the strategic deployment of the assets, settlement of purchases and sales, income collection, record keeping, tax lot recording, and asset safekeeping are done by a third party to insure safety. Northside will never have custody of the assets. The custodial institution will usually be a bank trust department or brokerage. As one would expect, this decision will be made with the utmost concern for safety, convenience, and low cost. Northside will also coordinate its asset management service with each client's trusted advisers, legal counsel, estate planners, key Family Office personnel, etc.

In order to save our clients time, money, and hassle, Northside will devise a customized plan to report portfolio status and performance. If it is more convenient to receive statements and communications in electronic form (Excel spreadsheets, Quicken, e-mail), we will be happy to comply. Periodic meetings will be scheduled and can be formal or informal in nature. With an eye to tax efficiency, we re-organize each client's portfolio to maximize after tax performance and provide broad diversification suitable to each client's unique situation, risk tolerance, and time horizon. During this process, Northside draws from the accumulated experience of its principals and their qualitative research.

INDIVIDUAL PORTFOLIOS

A portfolio, like a custom designed exercise regimen, is different for every person. Individual returns are a function of risk tolerances, income needs, and weightings in various asset classes. Yet portfolios managed by Northside will most likely consist of the following components:

Fixed Income.
The allocation to this sector will depend on the current income needs of the client and the client's tax profile. This allocation may consist of individual bonds, municipal specialists, or state specialized tax-free bond mutual funds (no-load). In most instances, having allocations to global bond funds, or non-tax advantaged fixed income vehicles, is not usually efficient after taxes.

Stocks for Growth.
This sector will consist of tax efficient equity vehicles and broadly diversified equity funds. Some individual stocks may be held, especially for tax or charitable gifting reasons. Northside strongly believes in diversification across the range of company sizes from large to small, on a global basis, we also believe that an efficient combination of index funds and active management is important for long-term success and risk control.

Real Assets for Dollar Diversification.
Real Asset exposure is both financial insurance for dollar denominated assets and a currency proxy in times of low expected returns. Portfolios will be balanced with both passive investments and active managers.

Alternative Investments for Wealth Creation and Preservation.
The principals at Northside believe that many of the best opportunities for wealth creation and risk control over the next decade are found in the realm of what is broadly described as alternative investing. The principals at Northside maintain widespread global contacts in this specialized, frequently complex, and relatively closed network of investors, as well as the required experience to evaluate, vet and monitor properly and insightfully these opportunities for our clients.

Over the past 20 years, many of the investment industry's most talented investors have gone out on their own. These professionals are seeking to concentrate on their areas of particular expertise without being fettered by the constant need of Wall Street firms to generate fees and commissions and stick to conventional, readily marketable approaches. The professionals have tended to gravitate toward private equity funds and hedge funds. These types of funds, usually in the form of partnerships, have three main obstacles: 1) The SEC limits the number of partners; 2) Since investors are presumed to be sophisticated, disclosure requirements are minimal; 3) The general partner cannot advertise the fund. The consequence of these conditions is that investment minimums are high for these partnerships, broad diversification is difficult, and the typical individual investor cannot even find out about most opportunities.

Why pursue these opportunities? Unlike the typical mutual fund, where success is heavily a function of whether the broad market is rising, and performance is measured relative to an index that may be positive or negative, each of these alternative funds is unique. Managers are seeking to exploit their superior skill or an information advantage through isolating and carefully controlling the risks they are willing to take. The key measures of performance are not relative measures, but absolute measures: Did the strategy make money, regardless of broad market direction, and was the positive absolute return sufficient, given the risks the manager is taking? Such investment performance does not typically move in lockstep with any other fund, or any other market. This lack of correlation of returns has an effect on portfolios that invest in such funds that is paradoxical: adding a diversified array of these "risky" assets to a more traditionally structured portfolio can actually decrease risk.