By: Duane Blankenship | Category: Financial Services | Issue: September 2009
Melanie Hasty-Grant and husband Ken Grant help clients benefit from a complete range of customized financial services offered by Waterstone Private Wealth Management.
Waterstone Private Wealth Management is a boutique investment firm whose professionals provide tailored services to their family of clients, including small businesses, couples and individuals. According to Melanie Hasty-Grant, principal and founding partner, “We offer our clients a sensible approach to long-term investing, providing customized financial solutions for every stage of their lives.”
Melanie’s husband, Ken Grant, partner and wealth consultant, says, “A lot of people visiting us lately have seen investment losses of 30 to 40 percent in their portfolios.” The economy has changed. The old “buy, hold and hope” theory is no longer working. Even Warren Buffet, the world-renowned expert on investing, says that this is not an effective strategy for managing future investments.
“In the past, advisors were trained to follow the Modern Portfolio Theory, which says that markets are orderly and show an upward trend over any 10-year period, and that buying good quality investments and holding them for the long term will make money,” says Ken. This strategy has often been misapplied and used as more of a “buy, hold and ignore” approach. Studying statistics over the last decade, we find that due to a global economy and increased volatility in the markets, the buy-and-hold strategy resulted in a decline in market value.
Waterstone believes that we are in a range-bound market, not a secular bull market. This means that there will be rough waters ahead and, while there will be opportunities to make money, we will continue to see the markets contract and pull back more within a range, and not necessarily return to their higher levels.
In the past decades, markets have had “tailwinds.” Ken believes we are now in a period of “no wind” and even “headwinds” that could have negative effects on investments and require an investment strategy that knows when to take shelter and when to row the boat.
Waterstone consultants use an internal process to manage investments and employ a “grow, preserve and protect” model to help their clients weather prevailing market conditions. Their cutting-edge technology is comparable to Doppler radar; the system monitors over 600 variables, including pattern recognition, moving averages, insider trading and momentum. They believe in having a sell-side discipline as well as a buy-side discipline. “Our goal is to invest when the market has less risk and raise cash as the risk increases,” says Melanie.
Louise Yamada of Technical Research Advisors, LLC once stated, “There are two kinds of losses, a loss of capital and a loss of opportunity. There will always be another opportunity if you protect capital.” Melanie and Ken believe that protecting capital along the way is imperative. They manage money by identifying trends such as volatility, aging population, inflation and energy, looking at how they can best participate in those trends. They use technical analysis systems to help reduce risk by adding to positions when the market is lower and raising cash when the market is higher, as well as measuring insider activity including indicators such as cluster buying and unusual patterns.
Melanie concludes, “In today’s changing market, those who are most adaptable will survive.” Waterstone has developed a stress test that will assist you in determining if your investments are positioned in a way to withstand varying market conditions, such as inflation, deflation, strong dollar and weak dollar. “It’s alarming how many investment portfolios we review that have been managed strictly by asset allocation and nothing else,” says Ken. “Other factors must be taken into consideration with the market conditions we have seen over the past year.”
Waterstone Private Wealth Management is privately owned and clears through the nation’s largest independent broker/dealer, LPL Financial. This independent arrangement allows Waterstone to manage investments in an unbiased manner and provide advice that is in our clients’ best interest. LPL’s SIPC membership provides account protection up to $500,000 per customer, of which $100,000 may be in cash. Additionally, through Lloydes of London, LPL accounts have securities coverage of $99.5 million, subject to a $500 million aggregate firm limit. The account protection applies in the event a SIPC member firm fails financially and is unable to meet obligations to securities clients, but it does not protect against losses from the rise and fall in the market value of investments.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC.
Blankenship graduated from the University of Oklahoma and has enjoyed a lifetime career in advertising. He started his own advertising business in 1993 and enjoys creating graphic art and writing. Hobbies include hunting, fishing and pencil drawings. Duane and his wife, Janice, have been married over 50 years and are active in their church and community. He has been a contributing writer for Value News/Values Magazine since 2005.