We at Buttonwood are advocates of Modern Portfolio Theory. The basic principles of this style of investing are that portfolios should be composed of a broad spread of investments, to distribute risk evenly, across a spectrum of asset classes. The purpose of this strategy is that in the event of systemic failure in the markets, such as the 2008 global economic crisis, the chances of calamitous losses are substantially reduced.
Your BAC consultant will already have determined your tolerance to investment risk and will, consequently, be fully conversant with your individual preferences and needs. It's our job to ensure that investment expectations are evenly matched with your risk tolerance. Quite often we find that a healthy risk exposure expects overly modest gains, or conversely, a conservative risk exposure anticipates unrealistic goals. It is our job to make sure both sides of the scales are evenly matched.
Asset allocation, when implemented correctly, distributes your financial assets between an appropriate spread of investment categories. The purpose of this is to:
» Reduce overall investment risk
» Achieve a greater consistency in performance forecasts
» Diminish the risk/return trade-off of your financial portfolio
This is entirely structured around your investment portfolio. We would be working with your financial basics include assets such as equities, fixed income securities and pooled investments such as ETFs and Mutual Funds.
Most investors grasp that that as risk increases, the potential for higher returns also increases. However, there is a cut off point for every investor whereby the potential for loss overwhelms the potential for better returns. It is through our intelligent use of asset allocation tools, that BAC can provide you with the risk/return ratio that you feel most comfortable with.
At Buttonwood Capital Advisors, we take pride in our ability to stay ahead of competing investment advisors by maintaining an intimate knowledge of new products on the market and by understanding the legislative environment. Tailoring products and portfolios make the difference between modest investment returns and strongly robust profits at regular intervals.
All issuers, investment banks and providers of financial products must satisfy our high standards and criteria for investment including a straightforward fee structure. We make sure an adherence to the asset composition, as outlined in any prospectus, is maintained, as well as constant monitoring of the rules and regulations governing investment products.
All our approved providers are subject to review via BCA’s in-depth assessment and stringent criteria. This includes any tax positions claimed by the providers in connection with their products. We assess all available financial models, to determine all reasonable expected costs, as well as benefits associated with the investment. Our pledge to our clients is that we only advise products that pass our review standards before recommending them.
There are many aphorisms in the financial advice sector with respect to when to buy, and when to sell. No honest broker can claim to have all the answers but, thanks to comprehensive analysis, depth of expertise and commitment to our clients, we are confident that each stage of the process will yield satisfying results in an uncertain world.
We are keen observers of securities and their price actions. These movements in prices are called technical analysis (TA). The methodology is chart-based analysis on underlying securities, commodities, asset classes or even an entire index such as Dow or NASDAQ. The key thrust of technical analysis (TA) assumes that all factors able to change the potential return of a security are already present in the pricing.
Fundamental analysis requires far more objectivity by paying more attention to the "nuts and bolts" of a particular security than the price action. It's the empirical facts that define this analysis rather than the emotion driving a security's price. For example, a company with minimal debt, consistently healthy earnings and proven management is considered a strong investment candidate.
In our experience, advocates of TA tend to ignore fundamentals such as adverse news, economic fluctuations and geopolitics. They reason that market reaction to news rather than the fundamentals of the news itself, impacts mostly at a pricing level. Buttonwood embraces both methods outlined above in order to identify appropriate securities we consider suitable for our clients' portfolios.
On occasion, we come across investment opportunities for that lie outside our mainstream market recommendations. These may be participation in an IPO, pre-IPO, private equity or an alternative investment. These are the types of investments that can make the difference between having a good annual return and the types of returns that have the potential to alter one’s entire financial situation. They are not regular occurrences which is why we refer to them as alternative investments. While such investments offer the potential for exceptionally high returns, they are generally accompanied by above average risk. Potential investments of this nature are rigorously vetted by our analysts and only presented to clients with an appropriate stated risk tolerance.