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SWA Investment Philosophy


Modern Portfolio Theory

  • Asset Allocation
    • Start with a plan. Select a stock/bond allocation based on your goals and time horizon
    • Utilize a broad range of asset classes to ensure diversification
    • “The sum of the parts over security selection”
  • Efficient Frontier
    • Upside/downside optimization
    • Risk adjusted return

Adhere to Risk Based Investing

  • Know your risk tolerance. Be prepared.
    • Understand volatility ranges to a 95% probability
  • Know your portfolios risk budget
  • Follow a systematic investment process

Timely and tactical adjustments

  • Seek value from tactical decisions
  • Disregard market timing
  • Quarterly review for rebalances
    • Sometimes the decision is NOT to rebalance

Focus on RESULTS

  • Performance rarely comes from individual security selection
  • Active vs passive
    • There is a place for both.
    • Passive investing still needs ACTIVE asset allocation!

Minimize investment costs, but don’t sacrifice value

  • Utilize top quartile money managers
    • Seek Alpha over benchmark
    • Index investing with a tactical managed overlay
  • Use strategic benchmarks to monitor results

Minimize taxes on investment gains when appropriate

  • Do not sacrifice investment decisions for a tax decision

Liquidity is an integral part of successful investing

  • Have a cash reserve with a purpose

Distribution strategies are an important component of portfolio longevity

  • Total return approach
  • Bear market adjustments to withdrawals