Investment Management & Consultation Services
After more than fifty years as a full service investment brokerage firm, Nestlerode & Loy, Inc., expanded its services to include investment management. We decided to offer investment advisory services to our clients because it represents a distinctly different business arrangement than that of investment brokerage.
While brokerage firms hope that their clients become wealthier through investing, brokerage firms are primarily interested in maximizing the number and size of transactions from each client. To this end, brokerage firms produce investment research which the Securities and Exchange Commission has ruled is merely material designed to induce people to make transactions. Brokerage firms meet their objective if their clients enter into buy and sell transactions. Investors meet their objective generally if their account grows in value over time. To this extent, the objectives of brokerage firms and their clients are in conflict.
Nestlerode & Loy, Inc., as an investment advisory firm, has dissolved the conflict in client and brokerage firm objectives by linking the firm's income to the success of their clients' investment portfolios. Because the primary income from investment management clients is fee based on the value of the client's holdings under management, the firm can only earn more from an individual client if that client's account grows in value. To this end, our business objectives of the client and our firm coincide rather than conflict. To reduce the costs of managing an investment operation, Nestlerode & Loy, Inc., trades each managed account at discounted brokerage rates, thereby saving client's substantial transaction fees over regular full service brokerage transaction fees.
Nestlerode & Loy, Inc., realizes that in any investment management operation investments will be made that are not profitable. To minimize the impact of these occurrences, the company invests only in those situations where an active, liquid market is expected to be maintained. In this manner, clients are not locked into situations that turn out to be disadvantageous. We, therefore, do not invest in limited partnerships, real estate, collectibles and other investments which have severely limited resale possibilities. Our investment management is generally limited to stocks, mutual funds, closed end funds, bonds, federal government bonds & municipal bonds and bank savings and certificates of deposit. To further minimize risk, we do not buy investments with borrowed money on margin. We do not use options, nor do we invest in commodities, futures or currencies.