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Our IAP™ is more than diversification

Investors may often hear the term Asset Allocation. So, what does that mean?

In its simplest form this refers to what portion of an investor’s portfolio is allocated to stocks versus bonds. 

A more granular version this could refer to what portion of an investor’s portfolio is allocated to US & Foreign Small Cap Stocks, US & Foreign Large Cap Stocks, US & Foreign Value Stocks, US & Foreign Growth Stocks, US & Foreign High Profitability Stocks, US & Foreign Low Profitability Stocks, US & Foreign Real Estate Investment Trusts (REIT’s), US & Foreign Government Bonds, US & Foreign Investment Grade Bonds and US & Foreign Junk Bonds. 

Other models might also include an Allocation to Commodities, Structured Products, Private Equity or Hedge Funds.  A rational Investment Allocation Process™ is the foundation of building a Purposeful Portfolio. 

At Warburton Capital we’ve thought long and hard about this and have actually received a Trademark for our Investment Allocation Process™ or IAP™.  Want to chat about this important and fascinating topic?  We would love to discuss it with you.




Begin with the End in Mind

So, a buddy comes in…actually…our buddy was visiting with us online via GoToMeeting as we at Warburton Capital continue to work remotely and shelter in place to defeat the Coronavirus!

Our buddy had been watching Financial Pornography and heard an “Expert” utter the alarming words “It’s Different This Time”!  Man, oh Man…I really think this “Expert” was dropped on his head before he was a year old.

Personally, I throw up when I hear alarmist statements like “It’s Different This Time”.  The Legendary Investor, Sir John Templeton, once commented that “The Four Most Dangerous Words In Investing Are – It’s Different This Time”!

The crisis du jour may change, but it’s never really different in the marketplace is it?

Investors around the globe meet in the marketplace to exchange securities in pursuit of a profit.  They make their bid/ask offers based on their individual views of all available information, market prices and speculations – Investors Do This Today Just Like Investors Have Done This In The Past!

The varied opinions of investors/traders are very healthy and lead to “Price Discovery”.  When a trade is made – everybody in the entire world knows Just What A Security Is Worth – At That Instant.  Of course, the Efficient Markets Hypothesis has taught us that that Unexpected News in the near (or far distant) future will lead to Securities Having A Different Price On Some Unknowable Date In The Unknowable Future.

Our advice to our buddy went down the road of “Let’s Forget About Forecasting, Let’s Derive A Rational Goal Achieving Plan and Let’s Begin With The End In Mind”!

Thereafter we laid out a 12 Step Program for our buddy – and any of you who would like – to pursue “A Rational Wealth Management Experience”:

  1. Make Your Goal(s) the Centerpiece.
  2. Avoid “Investment Generalists” and engage in Top Down Planning with an Objective Professional who thinks about your wealth beyond, simply, “Your Portfolio”.
  3. Maintain a Long-Term Perspective and Long-Term Discipline.
  4. Globally Diversify Stock and Bond Holdings.
  5. Forget about What Percentage Of Your Investments Should Be In Stocks Or Bonds, rather, Allocate A Purposeful And Necessary Dollar Amount To Fixed Income For Emergencies and/or Lifestyle Funding.
  6. Having funded your Known Spending Needs with Fixed Income, Allocate Surplus Liquidity to Global Equities.
  7. Invest your Fixed Income conservatively (we each take plenty of risk with our Equities – don’t bear a similar risk with Fixed Income) favoring short-term investment grade Bonds.
  8. Over-Weight Equities to Sub-Asset Classes which have exhibited statistically significant broad market out-performance on a risk-adjusted basis.
  9. Invest ONLY in Securities with minimal expenses (Give yourself a “Fair Shake”) and minimal tax ramifications (Why pay unnecessary taxes?).
  10. View short-term markets news as “interesting” but not “useful”.
  11. Ignore the forecasts of the financial media and other speculators.
  12. Sit back and Enjoy Your Life!

Having considered our logic, our buddy sat quietly, appeared to be reflecting, scratched his head a few times, nodded affirmatively and blurted out – “I Get It – Let’s Do It”!

Our buddy is now on the road to deriving, with our collaboration, A Rational Wealth Management Plan designed to achieve his uniquely personal goals with minimal risk.

Our buddy is, also, starting to view the financial market talking heads as Entertainers – which they certainly are!

In closing, I trust you are watching CNBC much like you watch the Weather Channel.  It’s a terrific source of Current Events which we find to be “Interesting”, however, “Not Useful” for Long-Term Goal-Achieving Planning!

I further trust you are not making investment decisions based on the many – and often conflicting – predictions coming out of the mouths of the “so-called” speculating experts.  These folks on Television are experts alright, experts at entertaining us!

Always wishing you well, I remain

On Behalf of the Firm,

Tom Warburton




Coronavirus and the Market

What is the impact of Coronavirus on my investments?

The term “novel coronavirus” is so new, some people have apparently wondered whether it is related to Corona beer. (It is not; it’s named after its crown-shaped particles.) And yet, how quickly it has grabbed global headlines. As the viral news has spread, so too has financial uncertainty. What’s going to happen next? Will it further infect our domestic or global economies? In case it does, should you try to shift your investments to remain one step ahead?

Our advice is simple: Do try to avoid this or
any other health risk through good hygiene. Wash your hands. Cover your mouth
when you cough. Eat well, exercise, and get plenty of sleep.

But do not let the
breaking news directly impact your investment strategy.

The keys to following an evidence-based investment strategy
are …

  • Having a globally diversified investment
    portfolio.
  • Structuring your portfolio to capture a measure
    of the market’s expected long-term returns.
  • Tolerating a measure of this sort of risk to
    earn those expected long-term returns.
  • Identifying how much market risk you must expect
    to endure to achieve your personal financial goals and allocating your
    investments accordingly.

In other words, it may feel counterintuitive, but if you
have done the above you have planned for this type of contingency already. In
investing, there are things that you can control, and there are things that you
cannot. The impact of coronavirus to the market is something that we can’t
control; sticking to your plan is.

Admittedly, that’s often easier said than done. Here are a
few reminders on why sticking with an evidence-based investment plan remains
your best financial “treatment.”

“I’m assuming there will be no
apocalypse. And that’s almost always, if not quite always, a good assumption.” —
John
C. Bogle

If you’re not invested, your investments can’t recover. Few
of us make it through our days without enduring the occasional moderate to
severe ailment. Once we recover, it feels so good to be “normal” again, we
often experience a surge of energy. Similarly, markets are going to take a hit
now and then. But with historical evidence as our guide, they’ll also often
recover dramatically and without warning. If you exit the market to avoid the
pain, you’re also quite likely to miss out on portions of the expected gain.

Markets endure. We by no means wish to downplay the
socioeconomic suffering coronavirus has created. But even in relatively recent
memory, we’ve endured similar events – from SARS, to Zika, to Ebola. Each is
terrible, tragic, and frightening as it plays out. But each time, markets have
moved on. Whether coronavirus spreads further or we can quickly tamp it down, overwhelming
historical evidence
suggests capital markets will once again endure.

The risk is already priced in. The latest news on
coronavirus is unfolding far too fast for any one investor to react to it … but
not nearly fast enough to keep up with highly efficient markets. As each new
piece of news is released, markets nearly instantly reflect it in new prices. So,
if you decide to sell your holdings in response to bad news, you’ll do so at a
price already discounted to reflect it. In short, you’ll lock in a loss,
rather than ride out the storm.

Bottom line, market risks come in all shapes and sizes. This
includes the financial and economic repercussions of a widespread virus, be it
real or virtual. While it’s never fun to hunker down and tolerate risks as they
play out, it likely remains your best course of action. Please let us know if
we can help you maintain your investment plan at this time, or judiciously
adjust your plan if you feel it no longer reflects your greater financial
goals.




PRESS RELEASE: Dr. Emily K Carter DDS MSD

Thomas K. Warburton, Chairman of Warburton Capital Management announced the appointment of Dr. Emily K Carter DDS MSD to our Advisory Board of Directors.

Dr. Carter attended Bishop Kelley High School in Tulsa where she met her husband, Noah. She then graduated from the University of Kansas with honors and a degree in Human Biology.

Following undergraduate school, Dr. Carter attended dental school at the University of Missouri-Kansas City School of Dentistry. She graduated summa cum laude and earned her Doctor of Dental Surgery Degree. She was also awarded the Public Health award for her efforts to improve care for indigent and underserved populations.

She was inducted into the dental honor society Omicron Kappa Upsilon, which is limited to the top five percent of a graduating dental class.

Upon completion of her dental training, she was accepted into residency at the UT Health Science Center in Houston where she received a Master of Dental Science degree and Certificate in Orthodontics.

Dr. Carter takes an active role in meeting and exceeding the standards of her profession. She is an active member of many professional organizations including the American Association of Orthodontists, the American Dental Association, the Oklahoma Dental Association and the Tulsa County Dental Society. Emily received the coveted “Most Likely To Do Epic (Expletive Deleted)” award from her Women In Dentistry Study Group.

Dr. Carter gives back to the community with her husband, Noah, through their work with Catholic Charities where she served on the NextGen Committee, the Cystic Fibrosis Foundation where they chaired the Tulsa’s New Leaders event and Emergency Infant Services by chairing the Kaleidoscope Ball.

Emily and her husband, Noah, live in Tulsa with their four children, Liv, Rowan, Finn, Lael and their dog, Yoyo. Dr. Carter loves spending time outdoors on Turkey Mountain, reading, riding horses and supporting local business. Given her pragmatic approach to parenthood, Emily has also been dubbed as “Worst Mom Ever” and “Meanest Mom Ever” by her beloved children!  I’ve advised her that ‘this is part of parenthood’ and ‘if the children are smart, their perception will change over the ensuing decades’.

Warburton commented “Emily’s brilliance, charm, service to our community and ‘take no prisoners’ approach to life are all qualities I admire.  I’m confident Dr. Carter will assist Warburton Capital over the ensuing decades in actualizing our Core Value which is To Help People!” Please join me in welcoming Emily to our Team.

Warburton Capital Management was founded in Tulsa in 2006 and provides investment advisory and wealth management services to business owners, professionals, corporate executives, individuals, families, endowments and foundations. The offices of the Firm are located in First Place Tower at 15 East Fifth Street, Suite 3675, Tulsa, Oklahoma, 74103.

This Press Release may also be seen here in the Tulsa World:

https://www.tulsaworld.com/business/businesspeople/financial-dr-emily-k-carter-dds-msd-warburton-capital-management/article_0488577a-e143-11e9-bd85-6375a7633fd1.html




Jonathan M. Hall CFP®, WARBURTON CAPITAL MANAGEMENT

Thomas K. Warburton, Chairman of Warburton Capital Management announced the election of Jonathan M. Hall CFP™ of Tulsa to the Board of Directors of Warburton Capital Management and promotion to the position of Managing Principal.

Jonathan has been a member of the Warburton Capital team and a principal of the firm since 2013. As Managing Principal of Warburton Capital, he will manage day-to-day operations, lead the firm’s advisory and operations teams as well as direct efforts to attract and retain talent. As a member of the firm’s Board of Directors, he works with the firm’s Founding Principal and the Board of Directors to derive and implement strategic decisions regarding the direction of the firm such as mergers & acquisitions, new lines of business and business development.

Jonathan is a CERTIFIED FINANCIAL PLANNER™ and works with Warburton Capital’s clients to help them define and achieve their short and long-term goals as a fee-only fiduciary financial advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA).

Jonathan earned a B.A. in History, a B.A. in Government, and an M.B.A from Oral Roberts University, where he served as President of the ORU Graduate Business Association. He further earned a Master of Science in Financial Services (MSFS) with an emphasis in Financial Planning from Saint Joseph’s University.

Jonathan is a graduate of Leadership Tulsa, Class 51, and serves as the Vice President of the Board of Directors for Emergency Infant Services. In 2019, City Councilor Phil Lakin appointed him to the City of Tulsa Sales Tax Overview Committee, representing District 8.  Jonathan often serves as an Adjunct Professor of Finance at ORU teaching Personal Financial Planning and Capital Markets. He served as youth pastor of First United Methodist Church of Jenks for several years and is currently involved in the children’s ministry at his church, Foundations Church.

Jonathan was recognized in 2016 as one of Tulsa’s “40 Under 40.” Active in politics, Jonathan was recognized in 2019 as Oklahoma’s “Young Republican of the Year.”

Jonathan and his wife Deanna Hall, a Registered Nurse, have two children: Adaline and Lincoln.

Warburton commented “Jonathan’s exemplary moral/ethical standards, vision, commitment to task, ability to manage multiple priorities and dedication to our clients and colleagues alike position him as an ideal candidate to lead our enterprise into the future, I’m confident he will succeed in actualizing our long-term strategic plan and achieving our plans for growth. Please join me in congratulating Jonathan.”

Warburton Capital Management was founded in Tulsa in 2006 and provides investment advisory and wealth management services to business owners, professionals, corporate executives, individuals, families, endowments and foundations. The offices of the Firm are located in First Place Tower at 15 East Fifth Street, Suite 3675, Tulsa, Oklahoma, 74103.

This Press Release may also be seen here in the Tulsa World:

https://www.tulsaworld.com/business/businesspeople/financial-jonathan-m-hall-cfp-warburton-capital-management/article_023906c4-c5c6-11e9-a7ea-a3ca173c013b.html