Moral / Business Quandary For A Money Manager

I manage money for a very wealthy individual who tried my services out for a small amount, based on a friend's recommendation last January. My mission for him, and all he cared about was that I beat the S+P 500, something he hasn't found any of his investment advisors had been able to do.  
When I received the funds to invest for him (Jan 15), the S+P sat at 1838, and is currently up at 2063, or a very healthy 12.24% gain.
I have invested his funds semi-conservatively from my perspective, until recently keeping much of it in cash, and am up almost 21% over that time, significantly beating the market averages.
Now, here is the dilemma. I can sell all, take a the proverbial knee, run out the clock, and even if the S+P continues to rise, I'll have still beat the market by the time Jan 15, 2015 rolls around, and I'll likely get a substantial amount more to invest.
Unfortunately, none of the gains made would be tax long term for my client. In fact, based on rather large gains I have especially in Apple, even if I knew that the stock would decline 3% over the next two months and hurt my "beat" my client would profit more overall from the lower tax rate if I were to sell it after a year's ownership. (to be considered long term gains, stocks must be sold a year or more after their initial purchase)
So, really there isn't much of a dilemma other than the fact that the game theory model of the world crosses my mind. I am there to serve my client, and my decisions must be made from that model not what's best for me.
Case closed.


Comments

Popular posts from this blog

How Google's Driverless Car Technology Will Affect Real Estate Prices in Los Angeles

Seeking Alpha Sucks to Write For- They Are Morally Corrupt

Why Doug Kass is Wrong About Apple