Banach Wealth Management

“Wealth Preservation requires understanding fundamentals and market valuations, and making good judgments concerning price relative strength for risk management” - - Joseph Banach

Banach Wealth Management uses moderately aggressive and conservative portfolio construction strategies based on a client’s objectives, risk tolerances, and constraints. Portfolio strategies adjust asset weights based on asset and market risk levels. The strategies and risk management adjustments distinguish moderately aggressive from conservative portfolios. Neither strategy uses leverage. Options may be considered in portfolios with highly appreciated large weight assets, as defensive protection during high risk market conditions.

A core and satellite portfolio construction strategy is used. Based on a client’s Investment Advisory Agreement (IAA), objectives and risk tolerances, portfolio assets, target weights, and limit conditions are defined. Portfolios are built and optimized using a wealth management approach that meets all client IAA goals. Core holdings are broad category assets with relatively moderate price movements that are expected to be held in the portfolio for long (e.g. 4 yr.) periods. Satellite holdings are narrower category assets with larger expected price movements that are planned to be held in the portfolio for intermediate term (e.g. 1 to 2 yr.) periods. Economic sector and alternative asset funds are examples of satellite holdings. Modern Portfolio Theory diversification principles are used to select relatively independent uncorrelated assets that approach a minimum risk for an expected portfolio return. Specific funds selected are the highest ranked in their peer group based on quantitative and qualitative criteria. Moderately aggressive portfolios normally include 50% core holdings. Conservative portfolios normally include 65% core holding with added weights of fixed income and value style assets. Assets are reviewed weekly and portfolio changes are generally directed quarterly. 401K savings plan choice limitations reduce the universe of available potential portfolio assets.

Capital preservation and growth objectives are both critical to the BWM portfolio management methodology. Asset positions are at times incrementally built to reduce the chance of short term negative price impacts. A partial asset position may be sold to take profits. In a high risk market, where asset classes are extended in price, some profitable assets may be sold. Our discipline is thorough. Portfolio cash positions rarely reach our 50% limit and portfolio turnover rarely exceed 35% in a 12 month period.