Our investment philosophy is based upon a combination of several components.  We believe that over long periods of time, the economy and thus the capital markets are largely predictable.  Demographic data are used to identify long-term trends, and strategies are crafted to prepare for different environments.  Sawchuk & Langenstein Wealth Strategies primarily manages retirement assets for investors over the age of 50.  History tells us that it is much more important to protect against loss of principal than it is to squeeze every last fraction of a percentage point out of the market.  Our portfolios are designed to be defensive during periods of elevated risk or volatility, and opportunistic when risk or volatility appears to be reduced.  

We belong to a group of highly trained financial professionals as members of the H.S. Dent Adviser Network.  The network was created by the H.S. Dent foundation as a means of introducing and disseminating research on demographic trends as a useful tool to forecast economic progress.  The research is conducted by Harry S. Dent, a Harvard Graduate and best-selling author, who discovered the most important connection between spending patterns of specific segments of the population, and their contribution to performance of the stock markets.  In 1992, in his book called “The Great Boom Ahead”, Harry predicted the stock bubble from 1995-1999, and the following crash in 2000.  Harry and his staff are now calling for a similar bubble from 2007-2009, and a larger downturn starting around 2010.  Research from the H.S. Dent foundation, in conjunction with data from a number of other sources, is the core of our overall approach.  Data in hand, we systematically review and modify our client portfolios every quarter.  The markets are so dynamic, particularly due to rapidly advancing technologies, that we feel compelled to take a proactive approach to investing. 

Years of research has revealed specific weaknesses of the traditional “buy and hold” through “asset allocation” investment approach.  The “buy and hold” concept is based on failed logic.  The approach is typically supported by the misleading supposition that the stock market historically averages about 10%.  At first glance the data are solid in support of the notion.  A closer look, however, reveals a serious flaw.  The 10% average is based on Ibbotson Associate’s research, which concluded that since 1925 the S&P 500 has produced a total return of between 10 and 11% annually.  The flaw, of course, is that no retired investor has a realistic life expectancy, thus “investment time horizon” of 80 years.  A fifty-year-old investor cannot realistically be expected to live to the age of 130!  Further study of the S&P 500 would suggest that the range of returns can fluctuate wildly, depending on overall demographic conditions, and a 10% average return cannot be relied upon for long-term planning purposes.  Now let’s address the concept of asset allocation models.  Without getting too technical, the H.S. Dent foundation has identified a significant problem with using Modern Portfolio Theory, the research supporting the case for asset allocation programs.  The bottom line, most asset allocation programs underestimate the overall risk of investing in equities.  The danger in using the approach would not appear until after a significant correction took place.  It is quite possible for the allocation software programs to overweight client portfolios towards equities, without adequately recognizing the inherent risk of loss.  Not good if you’re retired and don’t have enough time to make up the losses.  We address this problem by constantly evaluating a combination of current economic data in conjunction with updated demographic trends.  The data are used to adjust our portfolios for the probability of risk and return on a quarterly basis.  We believe that our proactive approach will help reduce the potential risk of significant loss of principal due to important demographic shifts.  When compared to the hopelessly optimistic “buy and hold” approach, we believe our clients feel much more secure knowing we are taking a proactive stance.

Attend one of our free seminars and you’ll learn in detail about our approach and what makes Sawchuk & Langenstein Wealth Strategies stand out in the world of retirement planning. You will be able to meet us in person and ask questions, but also the education you receive is sure to improve the chances of your long-term success. We look forward to meeting you.
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For more detailed information about Sawchuk & Langenstein Wealth Strategies approach. Please read about Dynamic Portfolio Migration and Mechanical Investing.