
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