Investment Management

Most individuals with substantial wealth have a significant portion of their financial life allocated to traditional investments such as stocks and bonds. As a result, the PWA Wealth Management investment management philosophy is of critical importance to this major financial asset.

Our clients come to us having accumulated their traditional investment portfolio through the sale of a business, executive compensation plans, accumulation in retirement plans, the sale of fixed assets, or through inheritance. The common thread for each client is the desire to protect and grow this critical asset base. Our first principle is to work diligently and prudently to attempt to build in sufficient safety measures to navigate very difficult market conditions such as 2002 and 2008.

We believe, and most independent research confirms, that outperforming the major stock market indexes on a consistent basis is difficult. Additionally, attempting to outperform the market consistently may lead to excessive portfolio risk and violate our first principle as described above. Risk and reward tend to be positively correlated.  Through research and tactical portfolio management, we believe there is an opportunity to capture market performance at lower levels of risk, which is our second guiding principle.

What is the investment process? We build each client portfolio individually and do not have generic investment models or proprietary products which we are required to include for all clients. Instead, we present strong, but open minded views of the nature of both investment dangers and opportunities in the market.

Your total financial situation, need for cash flow, risk tolerance and long term objectives are the most critical elements in building your portfolio. These factors guide us in determining the proper portfolio balance between growth and volatility for each situation. This balance is maintained within a manageable range and changes as market conditions change. However, we will avoid having a client “bet the ranch” when things look great or “stick their head in the sand” when the dark clouds are thickening.

Wall Street, particularly in the era of unimaginable computer processing power, has been able to create an infinite choice of investment vehicles from which a portfolio manager can select. We use individual stocks and bonds, various indices (typically through the use of Exchange Traded Funds or ETFs), and mutual funds.

On the stock side, our portfolios are heavily indexed with an overlay of individual stocks. We do extensive research in individual stocks, economic sectors and industries within sectors to identify areas of danger as well as opportunities.  We may identify that certain companies within a sector present attractive values. We may capture a sector by buying the index of the sector as well as individual names to enhance our position.

The bond portfolio serves a dual purpose: a means of reducing the volatility of the entire portfolio and as a source of cash flow. We do not chase yield, but we do look for good yields in vehicles that will offset stock volatility. Before the historic decline in interest rates, we accomplished this most frequently with municipal or corporate bond ladders with other indices or specialty mutual funds used as complimentary investments. In the current environment, the inefficiencies of the bond market at low interest rates have dissuaded the use of bond ladders except in special situations.


This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or investment strategy.  This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice.  Investments are subject to risk and loss of principal.  Past performance does not guarantee or imply future results. 

© 2021 PWA Wealth Management
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