Wealth Management Process
You cannot manage a person’s portfolio, if you don’t
understand the person first.
As part of
understanding a person, we learn their
and the members of their family. We study their needs, their wants,
their goals, their fears, and what keeps
them awake at night.
investment management process begins
with a “top-down” analysis
of the economic cycle, the financial
cycle, the commodity cycle,
and the interplay between them. We reach out
for the thoughts of other respected
but reach our own independent conclusions. This
is a daily part of the process.
we analyze the “asset allocation” or
how the portfolio is allocated between stocks,
bonds, cash, and alternative investments. Numerous
empirical studies have indicated that more
than 90% of investment performance is a result
of the proper allocation between these asset
classes. Careful attention is also paid to
the business cycle. If we expect weakening
economic conditions, we recommend more defensive
Further, we break down the asset classes by size
or market capitalization. For example, how much
of the stock allocation should be large companies,
mid-size companies, and small companies. At different
points of the business cycle, it makes a big difference.
Next, we study the sector allocation. For example,
how much of the stocks should be in energy stocks
versus healthcare stocks? Again, at different points
in the business cycle, it makes a big difference.
will find we don’t always discuss individual
stocks, like stockbrokers, because those stocks
can actually limit diversification. Normally,
we prefer Exchange Traded Funds (ETFs), instead
individual stocks or mutual funds. They can provide
much more targeted allocations, are more tax
efficient than mutual funds, and are almost
ETFs are preferred over individual stocks but
not over individual bonds. Sometimes, we
a mutual fund for specialized exposure, such
as small companies in the healthcare industry,
Most importantly, we are not stockbrokers. We receive
no commissions and like to meet our clients often
to discuss the portfolio. The client is the boss!
If the client wants to do something we think
is imprudent, we will advise against it, but
the client is still the boss! We are their investment
consultants. We have a fiduciary responsibility
to always act in their best interest.
We also study their estate plan and their income
tax plan, before making the investment proposal.
If appropriate, we will recommend an estate planning
attorney or tax accountant before accepting a client.
We feel strongly that our investment performance
should not be wasted due to poor estate tax or
income tax planning.
About Bay Capital Advisors
CERTIFIED FINANCIAL PLANNER™ professional, Registered Investment Advisor, financial advisor, investment manager, and money manager experts specialize in asset management, portfolio management, investment management, money management, financial planning, wealth management, investment strategy, and long-term investment for clients in Virginia Beach, Norfolk, Chesapeake, Suffolk, Portsmouth, Newport News, Hampton, Williamsburg, Hampton Roads, Eastern Shore, Fairfax, McLean, Virginia, Northern Virginia, Naples, Florida, Dallas, and Fort Worth, Texas.