After 25 years of teaching investment management, immersed in research, publishing and consulting as a Professor of Finance at some of the finest business schools and 15 years as Director of Research, Co-Director of the Investment Management Group and Principal of a sophisticated institutional investment management firm, Stanley J. Kon, PhD moved to the Colorado mountains. Skiing, hiking, the spectacular views and continuing as Editor of the Journal of Fixed Income seemed like the perfect plan to wind down and enjoy the grandchildren. Then his three 30-something married children asked him to recommend investments in their retirement accounts.
Our Story and Team
The challenge: Implement a self-sufficient portfolio management system
In order to better understand the complexity of what his children were facing, Stanley created a spreadsheet for each family of all their real and financial assets and liabilities, in order to focus on managing net worth. Each asset and liability had a long row of their respective risk dimensions. Then the investment weighted average of each risk dimension represented portfolio level risk characteristics in a dashboard. Each family had a home and mortgage, multiple 401K and IRA plans from dual incomes and past employment plus a variety of brokerage, savings and checking accounts. Many of the funds among their accounts had overlapping risk dimensions, insufficient portfolio level diversification, active management risk and excessively high costs that were detrimental to wealth accumulation, especially in a low interest rate environment. In each case, a strategy was developed that improved portfolio performance substantially by lowering aggregate cost, improving after-tax income, and obtaining a more suitable risk-return profile. The process became so useful that he began doing it for extended family and friends.
The problem remaining was that they all still needed him. Stanley wanted his children to be self-sufficient, especially after he was gone. His children have demanding careers that required an efficient wealth management system with a limited time commitment. They would need some portfolio management concepts that he provided in the book Do-It-Yourself Wealth Management.
The working concept and birth of Ripsaw®
Implementation of these concepts is more complex. Spreadsheets are too cumbersome, require too much manual data input and have limited capacity for automation. Stanley knew that the ability to access accounts electronically was feasible. What was not clear to him is how to electronically access market data and detailed risk profile information on individual securities, mutual funds and ETFs to combine with account information upon which to build a user-friendly interface with underlying analytics for his view of a disciplined wealth management decision-making process.
Fortunately, Stanley has two sons, David and Joshua, that are technology and data experts with complementary skill sets. They said it could be done! Thus Ripsaw® was born, the name referring to their favorite black diamond ski run. An apt analogy to the challenges of navigating one’s financial landscape. Together, they formed Ripsaw LLC to develop Ripsaw® Wealth Tools. The result is a low fixed-cost subscription service platform that is sufficiently automated for the do-it-yourself (DIY) wealth manager to focus on achieving their investment objectives through a disciplined approach to portfolio construction, monitoring and revision decisions.