The program is an investment advisory program with continuous and regular supervision of investments by WS Wealth Managers Inc. using the advanced brokerage custodian platform provided by FOLIOfn Investments.

Combinations of stocks, exchange traded funds (ETF's), Closed End Funds (CEF's), as well as limited fixed income securities and mutual funds are combined into "model" FOLIO's designed to accomplish specific investment objectives. Subcriptions to certain combinations of FOLIO's and periodic modifications are designed to provide for superior risk management and an efficient and optimized form of Dynamic Asset Allocation custom tailored to each investor.

A "typical" portfolio in the program, analyzed using Morningstar Office software indicates a high degree of diversification with 1500 equity and 500 fixed income holdings. This level of diversification is possible, even in smaller accounts, in part because of the ability of the FOLIOfn platform to trade fractional shares.



Saturday, October 9, 2010

WS Aggressive Growth Low PEG I (Growth)

Non-diversified portfolio with only 20-30 holdings in companies that are expected to have very high growth rates, especially during periods when the US economy is expanding. The basic philosophy is that used by Peter Lynch (GARP=Growth At a Reasonable Price) and/or the 15 Criteria proposed by Philip Fisher.  This includes a screening requiring relatively low Price to Earnings/Growth (PEG) Ratios. Also, financial “staying power” to be able to finance growth with low debt—i.e. low financial leverage. Only companies with “proven” past and expected future earnings are included. Stocks are concentrated in industries with high “operating leverage” including bio-pharma, specialty software, and alternative energy. Stocks with negative correlation to others are sought, providing above average benefits from frequent rebalancing. Can move to as much as 50% cash/money market for short term periods when CIO believes that market is extremely overpriced. Very high volatility with expected Standard Deviation of 200-300% of the S&P500, but potential for Alpha above 30.

Past performance does not predict future performance. Extreme volatility and risk indicates that this FOLIO is suitable only for a small portion of a diversified portfolio. Because of relative lower capitalization of holdings, Modern Portfolio Theory indicates that total portfolio is benefitted (closer to “Efficient Frontier”) with some exposure to this asset class, except for extreme risk averse investors.

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