Portfolio Preservation: Heed the Four Immutable Realities

Research Update from RVW Wealth LLC

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Mar 23, 2020, 06:00 ET

LOS ANGELES, March 23, 2020 /PRNewswire/ --

"We have seen this play before," says Selwyn Gerber.

As Founder and Chief Strategist of Los Angeles based RVW Wealth LLC, he works with clients to see past the headlines, constructing a portfolio attuned both to market history and their specific needs.

"Global uncertainty should not preclude adherence to investment principles," says RVW Senior VP Stephen Seo. "In fact, we've boiled down our informed vision into what we call the 'four immutable realities' of investing in challenging times."

First: All bear markets share a common dynamic. Even though each storyline is different, negative market excitement has always ended the same way, with the bull crushing the bear. While underway, each bear market appears unique and unprecedented. Afterwards, the result of these gyrations feels much like all the other previous swings.

Second: Volatility and risk are very different. Volatility is the price that equity investors have paid for extraordinary returns over the long term. Risk is the possibility of permanent loss of capital. As the market responds to the alternating passions of greed and fear, volatility is an inevitable occurrence of the periodic over-valuing and then under-valuing equity prices. Equating volatility and risk can be a very dangerous mistake.

Third: Success requires a disciplined time perspective. Optimally-designed equity portfolios have done well over time – not all the time. Knowing that distinction is a key attribute of successful investors.

Finally: Disciplined portfolio design effectively treats immediate price levels as "noise". The media's up-to-the-second equity quotes should have little impact on investment decisions.

"A long-term portfolio must reflect the individual situation of the investor," says Jesse Pucinko, RVW's head of research. "That would include their needs for growth, safety and income. Right at this planning stage, the possibility of a severe market decline is factored in, so that nothing need be done were events to occur."

"We believe in managing wealth within a structure of discrete silos," says Jonathan Gerber, RVW's CEO and son of the founder. "Each silo should play a different role in the overall safety/growth composition of the portfolio. Going forward, modifications in each silo should occur with any change in the investor's circumstance."

"At RVW Wealth, all principals are also CPAs, giving us a bottom-line financial perspective that is frequently lacking in the Wall Street environment."

"Prices may fluctuate," Jonathan Gerber concludes, "but successful portfolio management follows immutable principles."

NOTE: The opinions of RVW officers should not be taken as specific personal advice to any given investor.

SOURCE RVW WEALTH LLC