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At Breneman Winbush & Associates, our first priority is to help our clients achieve their investment objectives. We believe we can best accomplish this by constructing portfolios that:
- Diversify investments effectively, thereby, managing risk
- Provide positive cash flows
- Reflect a reasoned approach to selecting stocks based on valuation
As it pertains to risk, many investors subscribe to Mark Twain’s philosophy captured in this memorable observation: “I am more concerned with the return of my money than the return on my money.” With this in mind, we work diligently to generate competitive returns for our clients, and we never lose sight of the need to mitigate the level of risk to which they are exposed. An excellent way of managing risk is to diversify the portfolio among the basic asset classes (i.e., stocks, bonds, cash) and within categories of assets. In general, there is a great benefit in selecting assets that move differently from one another---that is, assets that have a low-correlation. Thus, we pay particular attention to how different investments interact with each other to create the proper balance in the portfolio.
Second, our portfolios tend to include securities that generate a predictable stream of income. When comparing two investment vehicles that provide the same average rate of return, studies show that the one with lower volatility may result in higher effective rates of return. This is especially helpful when investors are taking systematic distributions from the portfolio. Like the “Tortoise and the Hare,” we find that slow and steady can indeed win the race!
Finally, we are always mindful of valuation. While we do invest in growth stocks at times, we are essentially for growth at a reasonable price. We find that investing in reasonably priced stocks provides an additional hedge from the kind of market uncertainties that lead to increased market volatility. Again, we want to help our clients realize their dreams and goals and to do so with the least amount of risk.
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