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