Portfolios
Heritage Portfolio
Objectives
- Minimize exposure of your assets to market volatility
- Maintain some stock market participation
Adam Anderson
Portfolio Manager
Blake Anderson
Analyst & Trade Desk
Jamie Cardwell
Administrator
Overview
The holy grail of investing is finding the maximum amount of return for the least amount of risk. In our quest to find this perfect balance the Heritage Portfolio was born. We use United States treasury notes with laddered maturities to provide protection of your principal with a small amount of long-term S&P 500 options for capturing market growth. The portfolio targets quarterly rebalancing to move profits from stock options to treasuries in up markets. Periodically your assets may be reinvested from treasuries to stock options during down markets. These strategies are designed to help capitalize on opportunities in the market with the objective of providing modest growth in your portfolio.
S&P 500 Options
U.S. T-Bills
How We Manage Risk
We aim to minimize interest rate risk and volatility by buying shorter term Treasury notes. We ladder investments in treasury notes over several maturity dates so that only a portion is being reinvested at once. U.S. Treasury Notes are backed by the federal government. Fixed income securities, like US Treasuries notes, not held to maturity may be worth more or less than the purchase price due to liquidity and interest rate risks.
Although options contracts are inherently risky, we help to mitigate this risk to the portfolio by holding a targeted 10% in this asset class. An option contract gives the purchaser the right to buy or sell a stock or index at an agreed upon price and future date. The value of an option can vary dramatically, even becoming worthless. Depending on the expected price of the underlying asset at the agreed maturity date, we may have to sell options positions at a loss. We may choose to exit a position at any time to take profits or limit losses.
How We Use Options
An option is a right to buy or sell a stock at a future date. Option contracts can be risky, and under certain circumstances can have unlimited risk, meaning you can lose more than the principal invested. When used properly and prudently options can bring extra value to a portfolio. The two main strategies we employ are:
1. Buying call options for potential growth.
2. Write covered call options to generate income.
We will buy a long-dated call option for a fraction of the amount of money we would need to own the index outright. If the price of the index is above the contracted strike price, we can sell the options for a profit. Using call options allows us to increase our exposure with a smaller investment. Once invested we may write call options to cover the long option position. This strategy allows us to trade potential future returns for a current source of income in the portfolio. Oftentimes we will close an option position prior to its maturity to take profit or limit losses.
Accumulator Portfolio
Objectives
- Capture market growth opportunities
- Maintain a moderate level of risk
Adam Anderson
Portfolio Manager
Blake Anderson
Analyst & Trade Desk
Jamie Cardwell
Administrator
Overview
Move beyond the typical moderate growth portfolio with the WealthGuard Accumulator Portfolio. Using strategies like those employed by multi-billion-dollar hedge funds, our team has combined our experience in bond selection and equities trading with option strategies to provide investors with a higher return potential. We target investing 40% in stocks, 40% in bonds, and 20% in options. If you are in the wealth accumulation phase of your financial life with an intermediate to long-term time horizon, and a moderately aggressive risk tolerance, the Accumulator Portfolio can be a great fit for your financial goals.
Our Stock Strategy
We have been buying and selling stocks for our clients for more than 20 years and are consistently scanning the markets for quality companies with earnings that are growing then waiting to buy at a reasonable price. Companies with consistently growing quarterly sales and earnings are our ideal target. Our team then follows the stock price movement relative to their value to identify desirable entry levels. Not every stock trade goes as expected, so we use alerts to evaluate companies that fall a significant percentage below our purchase price.
How We Use Options
An option is a right to buy or sell a stock at a future date. Option contracts can be risky, and under certain circumstances can have unlimited risk, meaning you can lose more than the principal invested. When used properly and prudently, options can bring more value to a portfolio. The three main strategies we employ are:
1. Buying options to leverage investments or define risk.
2. Selling covered options to generate income.
3. Writing cash-secured puts to generate income or enter a position at a preferred price.
If we identify a stock that meets our criteria and has active option trading, we may buy a long-dated option for a fraction of the amount of money we would need to buy the stock outright. If the price of the stock is above the contracted strike price, we can exercise the option to buy the stock at the lower price or sell the options for a profit. This strategy allows us to increase our exposure with a smaller investment. Once invested in a stock we may write options to cover those positions. This strategy allows us to trade potential future returns for a current source of income in the portfolio. Conversely, we may buy an option to sell the stock at a certain price to protect gains or cap losses if we are concerned about current market conditions. If we like a stock but feel it is too expensive, we can write an option that gives the holder of the stock the right to sell it to us if it goes down to our buy price or lower. If it does not, we will keep the premium received for that right as income. Covering these positions allows us to limit the risk to your portfolio. Oftentimes we will close an option position prior to maturity to take profit or limit losses.
Bond Selection
We minimize costs and protect against inflation by carefully selecting investment-grade, short-term bonds and holding them to maturity to minimize risk. With interest rates near historic lows, we feel this is the best way to defend portfolios against rising interest rates and help protect the value of your portfolio.
Explorer Portfolio
Objectives
- Manage for maximum growth potential
Adam Anderson
Portfolio Manager
Blake Anderson
Analyst & Trade Desk
Jamie Cardwell
Administrator
Overview
Looking for more growth potential in your investment portfolio? We have combined our experience in stock selection with option strategies used by most hedge funds to offset potential risks and create new opportunities for investors. The WealthGuard Explorer portfolio is an aggressive portfolio for people in the wealth building phase of their financial life with long time horizons and a high-risk tolerance. Maybe now is the time to try an actively managed investment approach with the added element of stock options.
Our Stock Strategy
We have been buying and selling stocks for our clients for more than 20 years and are consistently scanning the markets for quality companies with earnings that are growing, then waiting to buy at a reasonable price. Companies with consistently growing quarterly sales and earnings are our ideal target. Our team then follows the stock price movement relative to their value to identify desirable entry levels. Not every stock trade goes as expected so we use a stop-loss strategy to sell the stock if the price falls below the purchase price to help limit losses and protect your principal.
How We Use Options
An option is a right to buy or sell a stock at a future date. Option contracts can be
risky, and under certain circumstances can have unlimited risk, meaning you can lose
more than the principal invested. When used properly and prudently, options can bring
more value to a portfolio. The two main strategies we employ are:
- Buying call options to enter a position to define risk.
- Selling covered options to generate income.
If we identify a stock that meets our criteria and has active option trading, we may buy a long-dated option for a fraction of the amount of money we had planned to use to buy the stock outright. This strategy allows us to define the amount of money that is risked when buying a stock. If the price of the stock is above the option contract value at maturity, we can exercise the option to buy the full value of the stock or sell the options. If we like a stock but feel it is expensive, we can sell an option that allows the holder of the stock to sell it to us if it goes down to our buy price or lower. Covering these positions allows us to limit the risk to your portfolio while also allowing us to potentially buy the stock at a lower price and collect the option premium. Sometimes we will close an option position prior to maturity to take profit or limit losses.
Disclosures
*$100,000 minimum investment required. There is no guarantee that investment objectives will be achieved. All investment strategies have the potential for profit or loss and past performance does not guarantee future success.
Investment advisory services are offered through WealthGuard Advisors, Inc., a Registered Investment Advisor. The firm and Investment Advisor Representatives of WealthGuard Advisors, Inc. may only conduct business where they are properly registered or are exempt from registration requirements. Registration with the United States Securities and Exchange Commission (SEC) or any state authorities does not imply a certain level of skill or training. The firm is not engaged in the practice of law or accounting. All investment strategies have the potential for profit or loss and nothing is guaranteed. A copy of WealthGuard Advisors, Inc.’s current written disclosure brochure filed with the SEC (which discusses among other things WealthGuard Advisors, Inc.’s business practices, services, and fees) is available through the SEC’s website www.adviserinfo.sec.gov.
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