Investment Management
At Bernhardt Wealth Management we know from experience that financial success is most likely to be achieved through an unwavering commitment to a set of investment principles: efficient markets, modern portfolio theory, diversification, intelligent asset allocation and low cost investments. We design each client’s portfolio using these principles to lay the foundation for their future financial security.
It has been our experience that investment success is more likely to be achieved through an unwavering commitment to a set of clearly defined investment principles. These principles define Bernhardt Wealth Management’s investment philosophy, and serve as a platform for every portfolio we design for our clients.
EFFICIENT MARKETS
Security prices are determined according to all freely available information and by fierce competition among market professionals. As such, we believe it is virtually impossible for any single investor to consistently earn more profits than other investors by choosing securities that are undervalued. In other words, market forces create an environment where picking individual stocks does not guarantee superior performance.
MODERN PORTFOLIO THEORY
Modern Portfolio Theory (MPT) was developed at the University of Chicago by Harry Markowitz and Merton Miller and later expanded on by Stanford professor William Sharpe. Each of these professors later won the Nobel Prize in Economics for their contribution to investment methodology. Unlike traditional asset management, which focuses on predicting individual stock price movements, MPT looks at the portfolio of assets based on the combination of its risk and return components. According to the principles of MPT, there is an optimum combination of investments that will bring the highest rate of return for every level of risk.
DIVERSIFICATION
Investors can reduce their potential for loss by investing in a basket of different securities. In less technical terms, diversification means the same thing as the adage, “Don’t put all your eggs in one basket.” It is important to note that a diversified portfolio is not necessarily a properly allocated portfolio.
ASSET ALLOCATION
Academic research has provided evidence that an investor’s asset allocation decision — the choice of asset classes and the portfolio percentage allocated to each — is the single most important element in a portfolio strategy. It accounts for 94 percent of a portfolio’s performance compared with 2 percent for market timing decisions and 4 percent for security selection. Asset allocation involves diversifying among several asset groups to improve total return while reducing risk.
Strategic Investment Management Process
Bernhardt Wealth Management has developed the Strategic Investment Management Process to ensure that our clients’ portfolios are customized to their unique needs and goals, and periodically updated to reflect any changes to those needs and goals. This process enables us to achieve three important goals:
To create a road map for each portfolio, based on the client’s true financial goals
To institute a regular review process that keeps the client’s portfolio on track even when life circumstances or the markets have changed
To communicate progress to each client in a clear, useful way
At Bernhardt Wealth Management, we base all our portfolio recommendations on the four principles of Our Investment Philosophy. In keeping with these principles, we implement investing strategies that emphasize asset class allocation and minimum trading. The result is a portfolio that harnesses the power of the normal movements of the market while minimizing investment costs and taxes.
We believe that financial security and peace of mind are the result of developing an Investment Plan, and then following it consistently. Using our dynamic and disciplined Strategic Investment Management Process, we work closely with each of our clients through four distinct phases:
