WKU Innovation Campus News

The first thing you’ll notice about Anne Sawasky’s business card is the phrase, “relax about money”. As an investor coach/business advisor for Paul Winkler, this is what sets her apart from other financial advisors in our area. Anne educates her clients by acting as a guide and then an adviser–like a good teacher, she will warn you of pitfalls, re-educate you on your understanding and show you how to apply it to the real world. With Paul Winkler offices all over Tennessee, she was drawn to Sam Ford’s Bowling Green “North-of-Nashville” description of South Central Kentucky which led her to become a member of the WKU Smart Space. Because Paul Winker bases its financial advising on proven scientific evidence, Anne feels that a university connection is ideal for a Paul Winkler office. She is excited to realize the potential she sees in this area and is ready to help us “relax about money”, but in order to do that, we must understand the common investing myths that have the potential to destroy your investing peace of mind, and then we can use academic investing principles to build the most effective modern portfolio.

 Myths Beware!

●       Myth #1– Stock Picking– the belief that someone has the ability to pick stocks based on the belief that they will do well in the future.  Unfortunately, picking stocks is a losing strategy. Trying to identify, in advance, funds that will outperform, is a fool’s errand. In the long run, only a small percentage of active fund managers meet their projected profit margins. Picking stock winners before they start to outperform is statistically all but impossible.

●       Myth #2–Track Record Investing– the belief that If you pay more for popular stocks they will continue growing. Anne shares a quote from a mentor, “A tree doesn’t grow to heaven.” In other words, a stock's growth is finite. Past records of mutual funds are essentially worthless in predicting future success. In fact, 65 years is the minimum to show statistically significant data to show that a stock over-performs.

●       Myth #3– Market Timing – the tendency to make stock choices based on recent past performance or on a mutual fund’s track record. This is rooted in our desire to avoid pain and seek pleasure. There are always media stock market pundits saying that now is either a good time or bad time to invest in stocks or bonds, or in specific countries or sectors of the economy. The only truth about the stock market is its unpredictability. It is here that she references Harvard Business School professor Charles Ellis: “You have to be there when lightning strikes. That’s why market timing is a truly wicked idea. Don’t try it.”

Based on Nobel Prize Winning Science of Portfolio Theory

Paul Winkler’s empirically tested investing methodology, based on the Nobel Prize Winning academic investing principles of Harry Markowitz in order to eliminate speculation and gambling with your financial future. Therefore, portfolio development is based on a modern, disciplined approach to investing in a volatile market with 50% in stocks and 50% bonds. This prevents clients from losing money by getting in a cycle of buying high and selling low because doing so is very difficult to do, at least with any consistency. It seems so obvious, with the benefit of a hindsight, that past stock market crashes occurred when they did. But recognizing, in real time, that markets are about to tumble is much more challenging than most people think.

Apply Science to Your Portfolio

Winkler combines the theory of modern portfolio management with the framework of the portfolio.  The famous “Fama and French” three-factor model is used as its basis. These three factors include the size of firms, book-to-market values, and excess return on the market. In other words, the three factors used are small minus big (SMB), high minus low (HML), and the portfolio's return less the risk-free rate of return. This system awards the investor with proven profit margins over time, and since Paul Winkler has access to 25,000 unique stocks and bonds from 78 countries, it makes sense to put your money in their hands.

Anne is excited to meet you for a free consultation in her Smart Space location.  E-mail or call (615-205-0815) to set up your free consultation so that you can RELAX ABOUT MONEY!

**We loved telling you Anne’s story from Paul Winkler! Need your story told?  Contact us at KY Brand Builders today!

Holly Elmore - 270-999-1888

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