Portfolio Construction

Private Wealth Consultants utilizes a “core/satellite” strategy to building each client's custom portfolio.

The “core” consists of equity investments and income investments that comprise from 5% to 90% of the total portfolio. The core is designed for long-term holdings. The “satellite” portion is designed to take advantage of short-term opportunities in the investment universe. Generally, 5% to 20% of any one portfolio is invested in the satellite portion.

The equity core portion of the portfolio will allocate among the different domestic and international sectors depending on your personal risk tolerance and preferences. Large- mid-, and small-capitalization companies are utilized, as well as both growth and value. Some of the vehicles used include:

  • Individual Stocks
  • Hedge Funds
  • Structured Notes  
  • Equity Derivatives
  • Exchange-Traded Funds (ETFs)
  • Separately Managed Accounts
  • Private Equity      
  • American Depository Receipts

The core income portion of the portfolio is designed to preserve principle and generate consistent revenue. Some of the instruments utilized include:

  • Certificates of Deposit
  • Structured Notes
  • Preferred Stocks
  • Municipal Bonds
  • Government Treasuries
  • Asset-Backed Securities
  • Corporate Bonds
  • Royalty Trusts
  • REITs
  • Exchange-Traded Funds (ETFs)
  • Interest Rate Derivative Instruments
  • Collateralized Bond Obligations

The objective of the satellite portion of the portfolio is to take advantage of short-term inefficiencies in the market. Often, the market creates an arbitrage situation between a security, its option exchange, and current events that can generate a short-term return potential. Strategies employed include:

  • Covered Calls
  • Bull Spreads
  • Box Spreads
  • Bear Call Spreads
  • Diagonal Puts
  • Calendar Puts
  • Covered Straddles
  • Long Condors & Butterflies

We view proper portfolio construction as one of the most critical elements of your overall financial plan. By carefully constructing your portfolio using the most appropriate vehicles to match your financial objectives, risk tolerance, time horizon, and personal preferences, we believe we can help you both grow and protect your high-net-worth assets over the long term.


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