Wealth Management

You are looking for a solid method of investing — one that will allow you to confidently build a future. In 1990, three Nobel-Prize-winning economists were recognized for their roles in the development of Modern Portfolio Theory. It helped to explain how markets really work and showed a smarter way to invest.

Instead of active investing, relying upon attempts to time the market or pick future winning stocks, we help you to build and adhere to a disciplined portfolio of diversified passive asset class components. Using this practice, our investors learn the importance of lower costs, effective diversification and creating a portfolio designed to provide the highest expected return for a chosen level of risk. These principles are endorsed by the American Law Institute for the prudent management of fiduciary trusts.

Capital Wealth Advisors places you in the right position to capitalize on asset class investing. We keep a year-round, tax-conscious eye on your investments. To create your portfolio, we provide superior access to exceptional building blocks. You can also take advantage of other services provided by our diverse array of wealth management specialists. Best of all, you get a plan. You know your strategy. You understand the purpose of each step. Our constant objective is to help you meet your long-term financial goals. Our array of services provides a platform from which to grow. These include: maintaining globally diversified investment portfolios; building customized bond portfolios for fixed income investors; planning for retirement and other major life events; managing qualified retirement plan assets; and meeting risk management needs through appropriate insurance applications.

Learn about our principles & beliefs:

Markets work:  Capital markets do a good job of fairly pricing all available information and investor expectations about publicly traded securities.  This does not mean that markets always increase; instead, it implies that markets effectively and immediately capture all legal information via prices.

Diversification is essential: Comprehensive, global asset allocation can neutralize the risks specific to individual securities.  Capital Wealth Advisors builds portfolios that frequently contain over 15,000 securities.

Risk and Return are related: The compensation for taking on increased levels of risk is the potential to earn greater returns.  We will work with you to tailor your portfolio to meet your tolerances, needs, and desires.

Portfolio structure explains performance:  The asset classes that comprise a portfolio and the risk levels of those asset classes are responsible for most of the variability of portfolio returns.  No portfolio is one-size-fits-all and we will work with you create a portfolio structure based upon asset classes to target your tolerances for risk and return.

Passive vs. Active Management:

Active managers try to outperform the efficient securities market.  They attempt to analyze the market in order to identify and purchase investments that they speculate are "undervalued" (and to sell investments that become "overvalued").  This practice is commonly referred to as "stock picking."

Passive managers believe it is nearly impossible to "outsmart" the market, so they try to match the performance of the market (or specific asset classes) as a whole.  Passive management does not depend on a manager's speculation.  It instead is based upon discipline and the research-backed principles of modern portfolio theory.

Passive management: The logical choice.

• 93.6% of the differences in returns are explained by asset allocation.
• Market timing and security selection add little to the explanation of differences in returns.
• Most actively managed funds underperform by the amount of their investment expenses.
• The investment costs of expense ratios, transaction costs, and load fees all have a direct, negative impact on active management performance.