Portfolio Management

Successful investing in the stock market requires a significant commitment of time, energy and attention. While most investors manage their investments part-time, Portfolio Management is a means of hiring a team who spend their entire careers researching the markets and managing portfolios.

Most people don't fix their own cars, or learn to perform heart surgery. They hire people who spend their lives focusing on these skills. The same can be said for money managment. As an investor, you MUST stay the course to be successful. While returns on stocks and bonds have been very rewarding over the better part of the last century, the majority of investors have not been successful at growing their wealth in the stock and bond markets.

You may have seen the results, and maybe you’re wondering why investors have done so poorly in achieving market-like returns. We believe the answer stems from one main

issue--emotion. Time and time again, your hear, "I bought at the top and sold at the bottom." Emotion and not following a disciplined, systematic approach is the primary reason most investors fail to match the general stock market indexes. There have been three major bull markets in the past 80 years, and each one has ended in a technology bubble. In each case, stocks moved up too far too fast, aided by borrowed money and greed. When the technology bubble burst in the mid-1960’s, a long sideways market followed. By late summer of 1982, TIME magazine featured an article concluding that the stock market was like a “Roller Coaster to Nowhere.” It stated that the Dow Jones Industrial Average was 1000 in early 1966, but only 760 in August of 1982. With the real posibility we have entered another extended bear market, 15 to 25 years, which began in 2000, the need for managers who have demonstrated the ability to perform in sideways markets is crucial.

How do they perform well you might ask?

Within Portfolio Management, fund selection is one of the most important features designed to enhance overall portfolio performance. Once the manager has identified and targeted specific areas of investment opportunity, a proprietary fund selection process takes over. Your specific universe of mutual funds or subaccounts is analyzed by applying a series of in-depth processes that rate and rank funds and their managers within a particular peer group. As the screens are applied, mediocre funds are eliminated in an attempt to identify only top-performing funds for placement in your portfolio.

Secondly, the manager will perform the daily research and analysis across the broad equity, fixed income, and global markets with the intention of maintaining the most accurate financial forecast possible. From this analysis or “forecast,” the manager will pick the investment selection (i.e. Stocks vs. Bonds, Large Cap vs. Small Cap, Foreign vs. Domestic, ....) and fund selection for your portfolio, as well as monitor and update these selections on an ongoing basis.

Unless you have several hours a day to study the economic universe and constantly select your investments, Portfolio Managers allow for one to place their hard earned money into proven hands and know their money is being carefully reallocated according to prevailing market conditions.

Disclosure: There can be no guarantee the strategies employed will be successful. The investments and strategies used carry specific risks, including the potential for loss of principal.