Equity Investing
We seek to buy growing, profitable, and well-capitalized businesses at reasonable prices. The habit of relating quality to value is central to the WCA equity investing process.
Asset Allocation
A comprehensive suite of asset allocation portfolios focused on matching investment objectives with risk tolerance. Both passive and active strategies are offered.
Fixed Income
This portfolio seeks to generate a stream of income from a portfolio of 30 investment-grade corporate bonds. The portfolio is constructed as a “ladder” with maturities spanning 10 years.
Recent Commentary
Q4 Tactical Asset Allocation
As we start the fourth quarter, the major U.S. stock market averages hover around a 0% return for the year. That unexciting performance masks extraordinary volatility — a 35% February-March decline and a 50% March-August bounce back. Other assets demonstrated similar volatility (graph, next page). Through September 30, Long-term U.S. Treasury bonds returned over 20%, and Bloomberg Barclays Aggregate U.S. Bond Index returned 6.5%. Short-term T-Bills returned about 0.7%, and gold is up 24%. Volatility again ruled the roost in 2020, and diversified portfolios generally did better than all stock portfolios. As we head into the final quarter of 2020,…
Buying the Big Five?
Imagine an investment strategy wherein you might seek out the most successful and valuable companies. We will refer to this as the “big five” portfolio. Further, imagine that this “big five” portfolio bought the five most valuable companies in the Standard & Poor’s 500 index at each year’s end starting in 2000. Imagine further that this process was repeated each year ever since. How might this strategy of buying big and valuable stocks have done? The strategy produced positive returns, but the journey would have been painful and frustrating (chart A, below). Investing in the “big five” at the start…
Time for Tactical?
Years ago, it was easy to make money. Those who were around during the 1970s may even remember earning near 20%. A three-month CD in December 1980 earned over 18%, according to data from the Federal Reserve. Such rates are near 0.18% today — far below the core inflation rate (+1.3% year-over-year). At that rate, a $100 investment would grow to only $101.80 over ten years. Evaporating Interest Rates And don’t think buying longer-term bonds is the answer, either. Ten-year U.S. Treasury bonds now yield 0.7% compared to over 3% just two years ago. A $100 investment in a zero-coupon…