NRW Asset Management
 

What We Do

Books and Pencil

Your portfolio is constructed through an economic and quantitative decision-making process designed to best meet your investment objectives.  This is accomplished by: 

1) Implementing an investment strategy to take advantage of the economic environment and its effect on your specific asset allocation.

2) Incorporating your risk tolerance level that reduces the fluctuations and volatility of your investment returns. 

3) Monitoring and rebalancing your portfolio asset allocation strategy and;

4) Measuring your investment returns relative to your performance benchmark.

 

Meeting Your Objectives

We get to understand your objectives through one-on-one consultations discussing issues such as your current income and expenses, career, personal goals, investment return expectations and prior investment experience.  In addition, we emphatically request that you complete our Risk Tolerance and Investment Preferences questionnaire to provide us a picture of your financial needs currently and in your future.

Once your financial parameters have been identified, we will prepare a recommended allocation plan that outlines what asset mix is most suitable for your investment expectations and risk tolerance.  This allocation plan will guide us in the management of your account(s), and as a standard against which modifications are made when necessary.

Kid and Money

 

Investment Strategy

Money and Shadow People

We generally recommend longer-term investment strategies requiring a time horizon of five to ten years though shorter investment portfolio time horizons are available.

While we are not bound to a specific investment strategy or ideology for the management of your portfolio (except for how they might affect the risk tolerance levels we pre-defined with you), our investment strategies generally incorporate these methodologies:

 

  1. Modern Portfolio Theory

Modern Portfolio Theory (“MPT”) is the analysis of a portfolio of stocks as opposed to selecting stocks based on their unique investment opportunity.  The objectives of MPT is to determine your preferred level of risk then construct a portfolio that maximizes your expected return for that given level of risk.  Our investment methodology follows four (4) basic premises, each of which is derived from MPT.

    • You, as with all clients, are inherently risk-averse.
    • The focus of attention is shifted away from individual securities analysis to consideration of portfolios as a whole, predicated on explicit risk-reward parameters.
    • For any level of risk that you are willing to accept, there is a rate of return that should be targeted.

Portfolio diversification is not so much a function of how many issues are involved, but more a function of the relationships, proportions and correlation coefficients between each asset class.

  1. Asset Allocation

Asset Allocation is a broad term used to define the process of selecting a mix of asset classes, such as stocks and bonds, and the efficient allocation of capital to those assets by matching historic rates of return to their corresponding historic levels of risk.  Within this broad Asset Allocation, specific securities will be further utilized to diversity amongst investment styles and equity capitalizations.

We utilize seven model portfolio structures as Asset Allocation guidelines in designing your investment portfolio.  Each model consists of a different “target” Asset Allocation percentage comprised of different asset classes – spreading money among a variety of investments as opposed to investing in just one.  Thus, creating a more prudent approach to managing risk.  The investment mix is designed to incorporate your desired investment return given your tolerance for risk.  For example, the selected asset mix and other investment vehicles in your investment portfolio are diversified to reflect your risk profile.

 

Asset Allocation Model percentage of
Stocks Bonds Cash
Aggressive Growth
Long-Term Growth
Moderate Growth
Conservative Growth
Conservative
Fixed-Balanced
Fixed-Income

90%
80%
70%
60%
50%
40%
30%

10%
20%
30%
40%
50%
60%
70%

0% - 5%
0% - 5%
0% - 5%
0% - 5%
0% - 5%
0% - 5%
0% - 5%

Such allocation guidelines are a representation of a typical account composition but should not be construed as absolute.  Ultimately, the exact composition makeup and allocation of securities are determined by the client’s investment parameters, which can compose a more detailed and/or complex structure.


  1. Dollar-Cost Averaging

Dollar-cost averaging is the technique of buying a fixed dollar amount of securities at regularly scheduled intervals, regardless of the price per share.  This will gradually, over time, decrease the average share price paid for the security.  Dollar-cost averaging lessens the risk of investing a large amount in a single investment at the wrong time.

  1. Dividend Reinvestment

Dividend reinvestment is the technique of automatically reinvesting your dividends back into your equity or other portfolio positions where available.  This is done without commissions and sometimes at a slight discount to current market prices.  Portfolio dividend reinvestment enhances the compounding effect of growth and/or has similar attributes as Dollar-Cost Averaging in that you will purchase additional shares when the market price is either higher or lower.  This is not necessary recommended for those that want to maintain higher cash or liquidity positions.