Certain Wealth in Uncertain Times  ®

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A:  Too many individuals and money managers start with a discipline, but then meander through a series of purchases based on rumor, inside information (that isn’t,) fear of missing something, fear and euphoria. They end up with a portfolio that looks as if 20 random strangers threw darts at the stock charts!
      Ours is a more disciplined approach.  There are three financial components to our discipline: a timing/rebalancing component, an asset allocation component, and a stock selection component.
      For asset allocation, we rebalance our stock portfolios by reducing our equity exposure as traditional value barometers like PE Ratios, Price/Book Ratios, Price/Sales Ratios and Dividend Yields enter seriously overvalued territory, and increase our equity exposure as these barometers enter undervalued terrain.
      We rebalance our positions in the stock market to the extent that we capitalize upon known historical / statistical trends. Our timing component forces us to review the portfolio with some frequency and, by regular re-balancing and cost-averaging, forces us to buy low and sell high.

COPYRIGHT © 2009 STANFORD WEALTH MANAGEMENT

Q: Tell us your approach to managing money at Stanford         Wealth Management.

Questions and Answers about Stanford Wealth

Q: OK, so how DO you select individual stocks?
A:  The answer is, "Sometimes we don't." Sometimes we use stock market proxies like Exchange-Traded Funds, closed-end funds, and mutual funds, as when we want to be invested in an entire sector.
      When we do select individual stocks, we use the value indicators of Price/Earnings Ratio, Price/Book Value Ratio, Price/Sales Ratio, and Cash Flow -- after we verify the company's leadership position in its industry, the moat it has around its business, the quality of its management, and its financials.

Q: How qualified are the money managers at Stanford Wealth Management?
A:  Each of our money managers has been in the business for more than a quarter of a century. You want white hair, not white knuckles, on your side these days! Each of us spent decades in the stockbrokerage and money management business and are or have been Registered Representatives (stockbrokers), Registered Principals and NYSE Branch Office Managers (their bosses), Registered Options Principals (experts in listed options), Financial and Operations Principals (leaders in financial management and operations), and much more. We know the stock market cold — and hot.

Q: Do you believe in top-down or bottom-up analysis of stocks?
A:  I wish the world were that simple! Too many professional money managers answer that question in the most sonorous tones, "Well, we are basically top-down macro-economic investors," or, "Our analysis leads us to believe that a bottom-up approach yields the most compelling returns." (We go to a special Trust-Me School to learn to talk like that!)
      While we at Stanford Wealth Management certainly think of ourselves as first, asset allocators, then industry observers, then stock selectors, we don't invest in a rigid manner.
      We are typically a big-picture manager, but if we uncover a stock that excites our interest, we will immediately begin researching that firm, we'll talk to their management, customers and competitors, we'll find out all about them, and then we'll decide whether to buy the stock or not. So while we consider ourselves top-down investors, we still buy special situations for our clients.

Q: Can an investor do the same thing you do -- on their own?

A:  Absolutely. All someone needs is the TIME to do the research and keep up with the stock quotes, a certain amount of EXPERIENCE to be able to separate the wheat from the chaff, and -- most importantly -- the DISCIPLINE to stick to their asset allocation plan and industry and stock selection.

           Our clients typically become clients because they are smart enough to recognize that they have a full-time career.   They make more money doing surgery or building companies or guiding river adventures, so they devote their lives to what they are best at and ask us to handle the part we are best at. That's not always an easy decision to make -- many of us are too ego-involved in the investing process. We're great doctors or great lawyers or great architects or ski instructors or schoolteachers or whatever, so we assume we should be great investors, too. Nothing could be further from the truth. I'd be a terrible lawyer or architect -- but I'm a safe and good investor.
      I have the discipline to stick to a set of STANDARD OPERATING PROCEDURES which make money conservatively and consistently, year after year. If you like to travel, the idea is to have more money for traveling. If you like restoring classic cars, the idea is to have the money to restore old cars. Sometimes the investing process is just too time-consuming to be done part-time.

Q: If I want you to manage a portion of my portfolio, what will you charge me?
A: 
We provide the following rates, based upon total assets in the account:

On the amount up to $550,000....... 1.00%
On the amount above $550,000....... 0.75%

In addition, we enjoy special negotiated rates from some of the best low-cost brokerage firms in the country. The commissions you pay on equity, mutual fund, and other orders are so low that you may save enough, compared to a full-commission broker, to pay for 100% of our fees!

Q: How can I discuss my needs with you?
A:  Call us at 800 253-2088 or e-mail us at portfolioanalysis@stanfordwealth.com. One of our two senior managers, JL Shaefer or Heather Williams, will respond personally.