Waits Investments provides portfolio management services for those who want their investments managed on an ongoing basis. We build and manage your portfolio using nonproprietary securities that may include: equity and fixed income Exchange Traded Funds (ETF’s), individual equities, fixed income securities, mutual funds, alternative investments, and commodities to name a few. We receive no compensation for products and other related services recommended.
Asset management services include: specification of investment objectives, goals, time horizon, account transfer assistance, asset allocation, formulation of portfolio strategy, selection of securities, portfolio revision through rebalancing as needed, and ongoing monitoring. We tailor each of our client portfolios to their respective goals and overall financial profile.
Investment Philosophy
Waits Investments employs a long-term term approach to investing primarily using low-cost index funds and ETFs. We utilize both a passive and active approach to investing. We strive to be tax efficient and keep costs down for our clients, yet we also understand that there are opportunities when an active approach to portfolio management is in the best interest of our clients.
Invest for long-term goals: Stocks and bonds can be wildly volatile in the short term, but over longer periods of time, that volatility decreases significantly. So we strive for investments to be held for a longer time frame in order to experience a more average return. For bonds, the appropriate time frame is at least 3 to 5 years and for stocks, it is 5 to 10 years. Whatever money you will need within the next three years, that money should be held in relatively safe investments like CDs and money market funds.
Diversification: Whether clients are invested in stocks, bonds, or a mix of both – we will diversify among these asset classes as broadly as possible. ETF’s are a great tool to ensure this diversification and will be used frequently by Waits Investments as a portfolio manager. A well-diversified portfolio will help reduce market risk over longer periods.
Investment Selection: Waits Investments believes that the majority of portfolio returns are directly related to asset allocation. That is the percentage of stocks, bonds, and cash in the portfolio. Our goal at Waits Investments is to get the asset class right first. A good example of this is in the 2008 financial crisis. If you were invested in equities, it didn’t matter which stock, sector, or country you were invested in – they all went down. An asset manager, who had their clients assets heavily weighted in cash, would have significantly outperformed their peers.
Cost/Tax Efficiency: By minimizing trading commissions and mutual fund fees, we are putting more money into your pocket: which in turn is more money that can be invested. Over long periods of time, these fees compounded can have a meaningful adverse affect on a portfolios performance. It is also important to take into consideration each client’s tax situation before selecting an investment.
Although we strive to get the large market calls right, Waits Investments does not believe in trying to time the market in short term. Commissions and tax inefficiencies put these short-term trading managers in a hole from the start. We still have not met anyone who has a consistent record of beating the market with short-term trading over longer periods of time.
Managing Emotions: One of the most important things for any investor is to keep their emotions in check. The great investor Sir John Templeton famously said “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell”.
Here is what Warren Buffett said regarding his portfolio management style “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Our goal at Waits Investments is to look at the sentiment, political, and economic forces that move the markets – and keep emotions out of it.
*We use TD Ameritrade as custodian the assets for portfolio management services. TD Ameritrade is a leading discount broker with local offices around the country. For more information on TD Ameritrade, please visit: www.TDAmeritrade.com
* Past performance of markets or of any individual security may not be indicative of future results. Investing involves risk and potential for loss. There are no guarantees.
