Private Investment Management

Investment Philosophy

Private Investment Management (PIM®)

Portfolio management is a consultative process where the portfolio manager oversees the development of each client's personal investment plan. This process is further enhanced with the use of Wells Fargo Advisors' Envision® investment planning tool. We begin with a comprehensive review of our client's goals and priorities. After we have helped the client define measurable goals, given the ever-changing market conditions, we then begin the process of designing, implementing and monitoring his or her investment portfolio.


Asset Allocation

The organizing principle of all accounts under our supervision is that investors, either now or in the future, seek a rising stream of investment income. Since fixed-income securities by their nature are unable to provide rising income, and since equities have the potential to increase their dividends, albeit with potential additional risk, each account will be assigned what we believe to be appropriate weighting of equity securities unless the client specifically requests otherwise. 

Security selection and allocation decisions are based on the client's tolerance of market volatility as well as investment objectives, guidelines and constraints agreed to by the client.


Security Selection

Accounts seeking long-term capital growth will generally be weighted with equity securities of the variety found in the Standard and Poor's 500 (S&P 500) stock index. Although dividend payments are not guaranteed, many of these generally have long-term records of increasing dividend payouts. Accounts requiring both current income and long term capital growth potential may be allocated a combination of equity securities and short and intermediate-term U.S. Treasury, federal agency, and high-quality corporate debt securities. Accounts whose primary requirement is current income may be overweighted in high-quality debt securities with an underweighting in equities.

Investment grade municipal obligations may be employed in accounts whose tax status makes it potentially advantageous to do so. Keep in mind that Wells Fargo Advisors is not a tax or legal advisor. 

Equity selection and allocation decisions generally follow the recommendations of firm's correspondent research. We rely on the firm's internal research capabilities, as well as correspondent firms' equity research that we consider some of the best in the business.


Constraints

Because we believe higher potential returns are achieved over time in accounts that remain fully invested, market timing techniques generally will not be employed. Over the course of a market cycle, however, certain sectors of the Standard and Poor's 500 may be under- or overweighted temporarily. 

In Private Investment Management portfolios under our supervision, risk is measured on an ongoing basis while performance is measured over a market cycle. Positions may be increased or reduced as price, performance and market conditions warrant. Clients should keep in mind, however, that historically short-term results have been a less reliable indicator of management performance than compounded returns generated over longer periods of time.


Ongoing review

Communication with clients is ongoing and frequent. In addition to monthly account statements, clients receive a personalized, comprehensive quarterly performance evaluation. The evaluation reviews asset allocation and highlights current and past account performance in light of stated guidelines; it also supplies relevant benchmarks against which the client may further measure performance. In addition, the quarterly evaluation graphs the account's growth since inception and its risk level.

Investment performance will be reviewed at least annually to determine the continued feasibility of achieving the client's investment objectives, as well as the appropriateness of the Investment Philosophy Statement for achieving those objectives.

As each Private Investment Management (PIM®) program account is individually managed, construction and ongoing management of portfolios may vary from those discussed in this Philosophy Statement.

Past performance is not indicative of future results, and there is no assurance that any investment strategy will be successful.

Asset allocation does not eliminate the risk of fluctuating prices and uncertain returns.

Investments and investment strategies contained herein are provided for informational purposes only. We would need to review your individual situation before recommending appropriate strategies to you. All investing involves risk, including the possible loss of principal. Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments. Investing in fixed income securities involves certain risks such as market risk if sold prior to maturity and credit risk especially if investing in high yield bonds, which have lower ratings and are subject to greater volatility. All fixed income investments may be worth less than original cost upon redemption or maturity. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline of the value of your investment. Income from municipal securities is generally free from federal taxes and state taxes for residents of the issuing state. While the interest income is tax-free, capital gains, if any, will be subject to taxes. Income for some investors may be subject to the federal Alternative Minimum Tax (AMT). Advisory programs are not designed for excessively traded or inactive accounts and are not suitable for all investors. Please carefully review the Wells Fargo Advisors advisory disclosure document for a full description of our services. The minimum account size for this program is $50,000.