News & Insights

The white paper, “Creating Equity Portfolios,” poses the question “Why do we recommend certain equity allocations?” The paper reviews the nuts and bolts of diversification and the factors we consider in forming equity portfolios. By considering data and research on different asset classes, including U.S. small cap and value, international equities, emerging market equities and… Read More >

Research has shown that selection of asset classes is the most important factor in determining the variation in returns of an investment portfolio across time and among portfolios.[1] This paper reviews PW&Co’s approach to selecting asset classes for inclusion in portfolios. I. Defining Asset Classes An asset class is a combination of securities that collectively… Read More >

Having experienced a period of falling rates that have positively influenced the return on bonds, many people are worried about the prospects that interest rates will increase. We do not believe that we can profit by predicting interest rates or timing the market. We do think it is important to understand what the market is… Read More >

Investment expenses can be a significant drag on investment performance. Some investment expenses are easily identified, and others are hidden from view. Authoritative studies of total investment expenses are scarce. The following table presents estimates developed by William J. Bernstein, an investment adviser and well known author in the field of financial economics (Bernstein, 2001)…. Read More >

The government started issuing Treasury Inflation Protected Securities (TIPS) in March, 1997 to offer investors protection from unexpected increases in inflation. Since inception in March, 1997, the Barclays Capital US TIPS Index has returned 6.5% per year versus 6.2% per year for the 5-Year Treasury. The annualized volatility of monthly returns was 6.1% and 4.7%,… Read More >

PW&Co uses a four step investment process to understand, analyze, implement and monitor a client’s investments. Our process is continuous and focused on responding to changes in a client’s circumstances, not the inevitable fluctuations in the financial markets. I. Evaluation Adviser reviews client’s goals, objectives, financial condition and tolerance for risk. The review encompasses the… Read More >

People often wonder if we don’t pick individual stocks or money managers that can beat the market, what do we do? We believe that there are a number of other things that are more important to managing investment accounts and realizing good performance. Write Investment Policies. Every client of our firm has an investment policy… Read More >

Our investment philosophy is based on a few guiding principles. Risk and Return are Related. Markets are relatively efficient; to achieve higher returns, one must take more risk. Risk as a Focus. Choice of investments should be based on ability to bear risk through good markets and bad, not just on desired return. Spending policy, time… Read More >

Fixed income investments are frequently utilized to reduce risk of the overall portfolio. To reduce risk, the investments selected typically have the highest credit quality (AAA) and shorter duration (<5 years). However, particularly for portfolios where taking large equity risk is not appropriate, exposure to a broader range of investment grade bonds may be desirable… Read More >

Investment professionals deal in risk and return, which under modern finance theory are inextricably linked. An interpretational problem arises, however, from the fact that risk and return are usually expressed on different scales: return is expressed in percent per year, and risk is expressed as standard deviation from the mean return. It is desirable to… Read More >