A Disciplined Long-Term Investment Approach
When investing for the future, we prefer a long-term strategy when we make investment decisions. We believe that when a long-term investment approach is applied, it benefits overall performance during market fluctuations.
Through a disciplined approach, we take some of the emotion out of the investing process. Therefore, we refrain from short-term trading, buying the latest stock, or investing in the seemingly hottest industry group.
Proper Asset Allocation
We believe that a sound investment management strategy must start with the correct asset allocation. For us, determining your comfort level with market volatility during our initial meetings is essential.
We feel the single most important decision made when investing is selecting the proper level of risk and volatility for each portfolio. This means choosing an asset allocation that is suitable based on your individual needs.
Then, along with the proper asset allocation, portfolios should be well-diversified among a broad spectrum of investment types and have appropriate exposure to the various economic sectors to help manage the client's investment objective.
*There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Prudent Diversification
While diversification does not guarantee protection from loss, we believe that it can substantially reduce risk. That is why we design and manage investment portfolios that are well-diversified across various asset classes. Within each asset class, we diversify across a broad range of industries, companies, countries, currencies, and credit ratings. Plus, we avoid taking any big bets on one particular asset class or sector.
Selection of Managers – Not Funds
At BWM, we do not choose funds, we choose managers. In making investment choices we look at the manager’s experience, his tenure, and his consistency of performance relative to appropriate benchmarks over 3, 5, and 10-year periods. We look at the approach and structure of a management team, along with its performance. We make our manager assessments according to a risk-adjusted basis as opposed to comparing just categories or peers.
Portfolio Rebalancing
We believe rebalancing is an important value-added service. What is rebalancing? Technically, it is the periodic buying and selling of assets in your portfolio to maintain your original asset allocation and mix of investments. The simple act of rebalancing can help you to lock-in gains and acquire additional shares when they could be a better value. By rebalancing your portfolio, your asset allocation remains within the range we initially chose, consistent with your acceptable degree of risk and volatility.
*Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.
Tax–Aware Portfolio Management
We can implement tax-aware strategies that are designed to help reduce taxes. We are experienced in mitigating tax consequences throughout the wealth management process. We exercise care when selecting the assets that we place in a client’s taxable portfolio and we stay focused on tax consequences as we consider options related to the withdraw of cash from savings.
We continually monitor and review portfolios for tax-saving opportunities. We consider all factors that help determine the appropriate source and from which accounts to draw when monthly income from assets is required. Having a long-term tax-wise withdrawal strategy can help improve cash-flow to a significant degree. Ultimately, we let opportunity and value drive investment decision-making, but we stay constantly aware of the tax impact as we choose or change the investments in a taxable account.
Behavioral Management
You may find yourself becoming overly optimistic when markets are rising, or overly pessimistic when markets are declining. Your BWM advisor can help you remain objective and disciplined through the various market cycle. We believe behavioral mistakes can have a major impact on your long-term portfolio performance and that timely advice from a trusted advisor can help you stay the course.
Fee Conscious Investing
Investment costs are a serious enemy to investment returns. Seemingly small fees can have an enormous effect on long-term portfolio performance. We believe that investors and advisors should be aware of all investment costs and be vigilant in helping to manage risk.
Unfortunately, investment costs are often invisible to the average investor. A large portion of the investment expense can be contained within the investment vehicle (such as the internal costs within mutual funds). Because investors never see an itemized list of these internal fees, they never know how much they are paying or how severely the fees are eating into their investment performance. This is a serious mistake.
At BWM we make a conscious effort to explain all investment costs to clients and wherever possible we choose to use the lower-cost investment alternative to help enhance investment performance. We constantly and consciously strive to keep investment costs both fair and affordable.