Managed Advisory Portfolios:
Shealy Wealth Management offers access to this asset management service as the preferred platform for single accounts valued at a $500K account minimum. These portfolios are managed strictly on a fee-based arrangement where discretion is required over the account management.
Shealy Wealth Management offers four investment styles. The four investment models are (1) Growth, (2) Growth with Income, (3) Income with Moderate Growth, and (4) Income with Capital Preservation. However, individually customized advisory portfolios are available provided certain account minimums are met.
STEP 1
A variety of different asset classes are targeted for potential allocation of capital. These asset classes are chosen based on developing global macro-economic trends, developing demographic trends, or trends that may develop as a result of new legislation being passed by global governments..
Once a variety of asset classes have been identified for the advisory portfolios, ETFs, mutual funds, individual equities, and individual bonds will be chosen to achieve representation for the asset classes. Each asset class is subject to its own unique market risks.
STEP 3
Through the use of highly sophisticated quantitative and technical analysis, the securities referenced in Step 2 will be bought when they are quantitatively or technically projected to be in an up trend. Conversely, the same securities will be sold when the up trend pattern of the security has been quantitatively or technically projected to have broken down or ended. An analysis of securities either owned in the portfolio or securities that could potentially be owned in the portfolios is performed daily and weekly throughout the entire year. If a buy or sell is determined through the daily or weekly analysis, then these trades are normally executed the next trading day. It is not uncommon for there to be large amounts of a portfolio to be in cash/money market fund, Short Term US Government Bond Funds, or Short Term US Government Agency Bond Funds if up trends are not present for the securities that are being tracked on a weekly basis. A major distinguishing factor in our asset management process is that we attempt to only own securities when they appear to be in an uptrend, and then to sell these same securities when the trends break down or end. Portfolios may remain defensively invested with some or a large portion of the portfolio while waiting for new up trends to emerge. We do not believe that buying and holding indefinitely is necessarily the best way to make money in various markets. Our goal in our asset management process is to produce a higher cumulative return over time through the effective use of cash/money market and other conservative asset classes referenced above than one would otherwise have in a more passive buy and hold style of investing. We are not day traders by any means. However through the use of quantitative and technical analysis, it is our belief that it makes sense to own securities when they appear to be in sustainable up trends that may last for months or years and then allocate into cash or conservative asset classes when trends break down or end.
STEP 4
Our asset management process is then repeated in Steps 1 through Step 3.
There is no assurance that the objectives will be achieved. With regard to the Managed Advisory Portfolios, these accounts are not charged a flat bee basis. These accounts are managed on a percentage basis of the account value. The fees charged for the Managed Advisory Portfolios include the following services: strategic asset allocation, portfolio design, on-going management, individual account performance measurement provided by LPL Financial Monthly and Quarterly Statements in conjunction with performance measurement of various indices. There are two versions of the Managed Advisory Portfolios. In one version, the advisor incurs all of the trading cost. In another version, the client pays the trading costs for the purchase and liquidation of the mutual funds which will fall into one three potential charges. For the purchase or liquidation of a mutual fund within this platform, the trading costs for a client for a mutual fund could either be $4.50, $13.50, or $26.50 depending upon the level of participation the fund company has within this LPL Advisory Program. For IRA accounts, there is a $40 annual fee. For accounts valued at less than $100K, there is a $10 per quarter administrative fee. There is not a minimum fee requirement; however, the annual advisory fee will not be any less than .25% and not any greater than 3%. Where the annual advisory fee ultimately falls within the aforementioned range is negotiated with each client individually. More actively managed accounts may be more appropriate and cost effective within this platform than for more traditional conservative “buy and hold” accounts. In addition to the annual advisory fee, the client is still incurring the internal fees of the mutual funds and ETFs owned inside of the accounts.
