5 Questions with Jim Arens of Trust Company of Oklahoma
BY LAURIE WINSLOW World Staff Writer
Friday, November 02, 2012
11/02/12 at 3:51 AM
Jim Arens is chief investment officer and a board of directors member of the Trust Company of Oklahoma, which has offices in Tulsa, Oklahoma City and Muskogee. The firm administers more than $2.6 billion in assets.
1: What services does the Trust Company
of Oklahoma provide?
TCO was founded in 1980
and has expanded beyond the trust
business during the past 32 years.
We manage assets for all types of
accounts, including investment
management accounts, IRAs,
401(k) accounts and trusts.
Some people think, given our
company name, that they must have
a trust to open an account with
TCO. That’s not the case. In fact,
investment management accounts
are the fastest growth area for our
company.
We also offer retirement planning
services, utilizing a sophisticated
software program. TCO also
administers 401(k) plans for small
and medium-size companies in
Oklahoma.
2: What is the firm’s investment philosophy
for individuals or organizations?
TCO’s approach is to customize
a portfolio that meets each client’s
unique goals and objectives.
For client bond portfolios, we
focus our investments on short- to
intermediate-term bonds. Our primary
goal in managing client fixedincome
investments is generating
a suitable level of income while
preserving principal.
For a client’s stock portfolio, we
primarily invest in high-quality
mid- and large-cap U.S. stocks.
However for diversification purposes,
we will invest a portion of
our client portfolios in other equity
asset classes such as international,
small cap and real estate, i.e. REITs.
TCO uses mutual funds to invest
in areas that TCO does not specialize,
such as international markets.
3: At what point should someone consider
setting up a trust? What are the
advantages?
There is a common misconception
that estate planning is only for
the rich. Estate planning can be
simple or complex depending on
the amount and type of assets that
are owned.
The type of trust most commonly
used is called a revocable or “living”
trust. It provides a number of
benefits over a traditional will. For
example, a trust can help to avoid
the delay and costs of a probate
proceeding while also protecting
your privacy, since a will is a public
document while a trust is not.
4: When it comes to retirement planning,
how much should a person plan on
saving to live comfortably in retirement?
That’s a function of several factors,
including how much they have
saved to date, when they plan to
retire and how much they plan to
spend once they retire. As a rule of
thumb, a person should save at least
10 percent to 15 percent of his or
her income (each year) to support a
comfortable retirement.
Americans are living longer given
the vast improvements in medical
care. It is important to save as much
as possible while working.
5: What is your outlook for stocks and
bonds heading into next year? What
kind of impact might the outcome
of the presidential election have on the
markets?
Our outlook for stocks next year
is cautiously optimistic. While
stock market valuations are reasonable,
corporate earnings are beginning
to decelerate and unemployment
rates are slowly improving.
We expect positive but belowaverage
stock returns in 2013.
As it relates to bonds, we feel investors
need to be extremely careful.
Given the current low interest
rate environment, it is important
for investors to avoid chasing
yields. Investors who allocate too
much of their portfolio in longerterm
bonds could suffer large losses
if interest rates rise.
Historically, in presidential elections,
the market has done better if
the incumbent party wins. However,
while presidential elections are
important, we think it is dangerous
to invest based on these types of
trends since every market cycle is
different.
Associated Images:
CORY YOUNG/Tulsa World
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