No-Load Asset Management

Investors have been conditioned through magazine, media and services like Morningstar to believe that their success depends on timing and management selection. When the truth be known, nothing could be further from the truth.  Studies have shown over and over again that sector selection is by far and away the greatest determinant of portfolio performance.  Yet, investors continue to pour over the mutual fund rankings and Morningstar reports like these are crystal balls with which they can predict the future.

The reality is that even the "best" managers struggle against the tide of negative investing sentiment, while "mediocre" managers enjoy profit in times when they’re said to have their day in the sun.  Money and the investors who deploy it always search out higher returns at lower risk, and they will constantly re-allocate their portfolios, searching out better risk adjusted returns (buy low-sell high).

This results in sectors coming into favor while others go out of favor.  Since the markets run on the basic laws of supply and demand, when a sector falls out of favor investors pull their money and inevitably the stocks and mutual funds that populate that sector drop- sometimes precipitously (reference tech stocks in 2000).

Unfortunately most investors armed with their Morningstar Reports and magazines consistently are behind the curve.  By the time they read about making a move, it is far too late in the game.  They move money into sectors and buy mutual funds in that sector long after most of the profits are already realized.  This is evidenced by the statistical fact that as investments rise, the vast majority of the money invested goes in very near the peak, just before the bubble bursts.

How do you avoid falling into their trap?  True, professional, commission-free managers hold the key to success. To most people it is an abstraction. They have never seen nor experienced proactive management, so they don't understand how powerful and profitable it can be.

Most investors either use traditional commission-based brokers/financial planners or are dyed in the wool do-it-yourselfers.  Investors go to brokers because they mistakenly believe that these people possess the experience, resources and motivation to manage their portfolio.

This was especially true in the 1990's when investors fell in love with the markets and their brokers while buying into an insanely overpriced market.  They made money yesterday, they made money today, so that must mean they'll make money tomorrow and the next day as well.  Routinely, investors blindly followed the "wisdom" of their brokers whose best advice was just to ignore the historical valuation models and keep buying.  All the conventional rules of investing were ignored in pursuit of the "new economy" stocks that apparently were supposed to defy gravity.  This was a road to ruin paved with huge commission checks, securities underwriting fees, bogus research reports and flawed accounting.

When the house of cards came tumbling down, what was the sage advice of the broker?  Just hang in there - it will get better.  Sadly, it didn't get better.  It continued to get worse to a point where many retirees lost such huge amounts it jeopardized their standards of living.

No doubt there was some merit in their advice to hold some worthwhile securities which were the babies thrown out with the bath water.  However, due to the extreme overvaluation, much of the selling should have happened in many sectors long before the great fall.  The truth is that brokers are nearly never managing money.  They are merely salesmen vying for the biggest commission checks and a corner office.  Their definition of success is directly at odds with yours.

As for the do-it-yourselfer, again it's easy to fancy yourself an expert when the tables are tilted so heavily in your favor as was the case in the 1990's.  Anyone looks like Lance Armstrong when they ride a bike down a steep hill.

Very few of these do-it-yourselfers were boasting of great returns by the end of 2002.  The truth be known, the do-it-yourselfer commonly operates on only a scant supply of the crudest of resources which coincidently are as stale as week old bread.

Most people lack at least one of the vital components to effectively do-it-yourself.  They either don't have the time, the resources or the experience to sort through the noise and make quality choices.

This brings us to professional asset management, what it is and what it is not.  The first and perhaps most important thing about true, professional asset management is that it is fee based, not commissioned.  Therefore, the fortunes of both managers and investors interlock and are indistinguishable.  You are on the same team, working towards a common goal - higher profits and lower risk.  This really puts religion in the process.  The manager has to treat your money as if it is their own.  Traditionally, this means the manager will work harder, keep costs down and be completely objective in the decision making process because they want to keep you as a client, be introduced to your friends and quite selfishly make more money which they can only do by making you more money.  The classic win/win situation!

Why choose proactive management with DeWaay Capital Management?  Because we have the vital component of success, experience and motivation to grow your portfolio.

The DeWaay Way

How do we perform asset management?  We always attempt to swim with the tide, not against it.  Therefore, we analyze the economy and the markets and continually ask "where can we get the best returns for the lowest risk?"  We try to put our clients and our own money in areas that offer the best risk-adjusted returns.  This frequently means selling at precisely the time the brokers and do-it-yourselfers are buying, and vise versa.  It's hard to go broke taking profits.  In Yogi Berra terms, "the best way to make money is to avoid losing it."  In this day and age "buy and hold" is an anachronism.  Strategic moves are essential in producing superior risk-adjusted returns by locking in profits and avoiding losses when a bubble bursts.

Q&A

Are you market timers?

We are not market timers.  DeWaay Capital Management is virtually always fully invested.  However, the sector mix and security selection will continuously change with the seasons.  We always stay very well diversified to control risk.  We cannot predict the exact timing of trends in the market, nor can we always overcome the illogical emotion that sometimes directs the markets.  However, we can help to seize upon logical valuation and economic-driven trends in the market.  As conditions change, we lessen our exposure in overpriced areas and concentrate moving in areas that appear to logically offer little risk-adjusted return.

Which portfolio is right for you?

There are several model portfolios that we offer, each conforming to different risk and return objectives.  Through the use of a risk tolerance questionnaire, we determine which of these portfolios is best suited to the circumstances of each client.  They would find themselves grouped in an allocation with other people of similar goals and parameters.

How do I know my money is safeguarded?

Your money is safe.  DeWaay Capital Management does not take custody of funds.  Your assets are kept at one of several institutions.  You authorize DeWaay Capital Management to execute trades, but we cannot under any circumstances without your approval gain access to your funds.  Unlike traditional brokers, at DeWaay Capital Management everyone is treated the same.  No one is given special treatment in our asset management portfolio models regardless of the size of their portfolio.  When a change is made in a particular model portfolio, it occurs simultaneously for every investor in that model, regardless of portfolio asset size.

Are there any hidden costs?

There are no commissions in portfolio management (although if you choose to include market alternatives through our broker dealer, DeWaay Financial Network, LLC, there may be commissions paid in that instance).  Likewise, there are no transaction fees and/or other form of compensation to us that would affect our objectivity (in instances where we use mutual funds and indexes, there are management fees charged by the fund managers, but we do not in any way share in these.  As such, we attempt to hold down the costs in any way we can because we are affected just as you are).

How do I get started?

Before investing, you need to receive a copy of our SEC Form ADV Part II, a DeWaay Advisory Services, Inc. agreement and a copy of our client confidentiality statement.  0 press here  Members of our experienced staff will take care of the rest.  You don't have to contact your existing broker if you prefer not to.  The assets will transfer automatically through the execution of transfer documents that we will file for you.

Can I access my money and/or can I draw a regular distribution?

In DeWaay Capital Management's asset management, your money is always available in part or parcel at any frequency you desire.  In fact, we can wire money directly to your bank on demand or at regular intervals - whatever your preference.

What if I want to terminate the service?

DeWaay Capital Management always wants what the client wants.  If for any reason you desire to terminate your relation ship with DeWaay Capital Management, we will cooperate fully and promptly to accommodate your wishes.  There are no outgoing costs or commissions.

The goal is better return for lower risk.  If you have not experienced true, professional management, you owe it to yourself to investigate how this proactive, objective, commission free approach can benefit you.  You simply won't believe the difference DeWaay Capital Management can make.