Customized Portfolio Design


StewartJones Wealth Advisory Group focuses investor attention on risk. Your personal financial plan serves as the foundation of your investment portfolio design.  It will determine the optimal structure and corresponding asset allocation target. The media’s perpetual reference to the S&P 500 performance is largely irrelevant within the context of designing customized, personal portfolios, and it is totally irrelevant in the short term within the bands of a market cycle. If your personal financial plan has a high probability of success at a 4.50% rate of return, your portfolio design should reflect a corresponding expected level of risk which will be lower than the S&P 500.  As Warren Buffet says, “it is insane to risk what you have and need in order to obtain what you do not need.”

Investment Policy

StewartJones Wealth Advisory Group will draft a Personal Investment Policy Statement that outlines the objectives, goals and guidelines for your portfolio. As a blueprint for the design of your portfolio, it will reference return targets and corresponding asset allocations targets and ranges. Further, it will serve as a meaningful basis for evaluating total portfolio performance, short term tactical decisions and long-term strategic decisions. Your Personal Investment Policy Statement integrates the crucial building blocks of your portfolio and serves as a dynamic communication tool for maintaining relevant goals amidst changing conditions.

Portfolio Design

The goal of portfolio design is to create an efficient portfolio that accurately reflects each client’s unique risk/return profile. Unlike forecasting a specific point-in-time, portfolio optimization describes the probability distribution of future returns taking into account the intrinsic risk of various asset classes.

Optimization requires three integral components: expected rates of return, standard deviation of the returns, and correlation between the returns. StewartJones Wealth Advisory Group utilizes a powerful mean variance optimizer that analyzes these factors simultaneously to produce a set of portfolios along an “efficient frontier.” Simply stated, the efficient frontier illustrates that for any given expected return there is a corresponding minimum level of risk and for any given level of risk there is a corresponding maximum expected return (see chart below).

Stocks and Bonds: Risk Versus Return

1970–2017

Past performance is no guarantee of future results. *The return of the portfolio is higher than the returns of the constituent asset classes due to a phenomenon called “the rebalancing bonus,” which occurred due to the unusual behavior of stocks and bonds over the time period analyzed. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © Morningstar. All Rights Reserved. 

Performance Monitoring & Analysis

Overseeing The Investment Process

StewartJones Wealth Advisory Group will provide a thorough Quarterly Performance Review that captures your portfolio’s vital statistics and presents them in a well-organized, easy to understand format. It is the basis for monitoring your portfolio’s overall progress relative to its corresponding investment policy. It will help you track the portfolio’s progress toward your long-term goals by evaluating your aggregate portfolio. Performance is measured relative to appropriate market indices and/or a customized blend of benchmarks that reflect your portfolio’s specific asset allocation target. In addition, proper evaluation of a portfolio’s performance should extend beyond nominal return to encompass measures of risk. The Quarterly Performance Review includes several alternative risk measures to help evaluate risk-adjusted returns.