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CRATUS CAPITAL, LLC 4358 Edinbridge Circle Sarasota, Florida 34235 Phone / Fax: 941-556-9043 Email: djohnedis@cratuscapital.com |
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| Cratus Capital’s Value Added to Our Individual Client Portfolios | ||
 Cratus Capital helps its individual clients add value to their portfolios in a variety of ways. Many individuals have assets in old 401K plans from former employers. There are many individuals who do not even know who is administering the retirement plans of their former employers. In most cases 401K plans have a limited number of investment options. For most individuals there are limited choices in these plans, and many of these plans use only one investment manager. Most plans only have one investment option in each asset category, and many plans do not even include certain asset classes. We found that most of these plans have little or no oversight in their investment fund line-up. So, poor performing funds remain in these plans. Some of our clients’ former employers are no longer in existence. The 401K plans get lost and the clients have little or no online access or communication. In many cases there is not even a contact name or phone number to get information on their old 401K plans from former employers. |
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 At Cratus Capital we investigate and find the plan administrators for many of our clients’ former 401K plans. We then transfer these assets into Rollover IRAs, giving our clients access to thousands of investment choices, including top performing low cost mutual funds and individual securities. The additional flexibility, greater transparency and improved communication result in better performance and a greater level of comfort and satisfaction to our clients. We often consolidate multiple 401K retirement plans from former employers so our clients can see all of their assets in one account rather than receiving multiple account statements from a variety of service providers. In this way, it is also easier to see the overall picture when conducting asset allocation analysis.A number of clients have come to us at Cratus Capital with accounts which are heavily weighted in either one security or one mutual fund. The major downside of having all of your assets in one investment is stock-specific or fund-specific risk. Should some negative news occur with the stock or fund, the downside risk is substantial due to the lack of proper diversification. One of our clients came to us with 90% of their assets in the stock of a financial services company. This stock was one of the top performing stocks in 2007. In 2008, this stock, like most financial company stocks, was down considerably. Fortunately, we had diversified our client’s account into other investments, including stocks, bonds, ETFs and mutual funds. We did the trades during a period of time when the market was declining. This helped to minimize the tax consequences of selling this low basis stock.  We increased the tax efficiency of this individual taxable account by adding some municipal bonds, ETFs and tax-efficient funds. While performance of most individual accounts was highly negative in 2008, our clients had positive returns and outperformed the market significantly. If we had kept the assets in this account with the one large financial services stock, the account would have been down more than 70%. Instead the account was up slightly for the year. This compared very favorably with the S&P 500 Index, which was down more than 40%. This is a great example of the benefits of diversification. At Cratus Capital we continuously seek the top performing and low cost investments for all of our clients. One other example of how we add value to our clients at Cratus Capital is in the way we keep expenses down for our clients. There are no custody fees or service provider fees, and our management fees are less than 1/2 of 1% of total assets. This is considerably lower than the fees charged by all of our competitors. The general fee range for individual accounts is 1% to 3% of total assets. Over time the savings from these reduced fees add up and help the overall net performance of our clients' accounts. We also have lower than average trading costs. One of the important steps in our investment process for selecting mutual funds is watching the expense ratios and fees and finding the top performing' lower fee funds. Again, this helps to provide our clients with the best overall performance in their portfolios. |
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