Robert A. (Rocky) Mills Senior VP, Financial Advisor & Portfolio Mgt Dir - Morgan Stanley Smith Barney
The Managed Beta Account (MBA) changes your portfolio’s stock percentages -- and thus its beta –- as market and economic conditions change. Automatically. Non-emotionally. And all for one annual fee. The MBA “thermostat” has a defensive low setting of 25% stocks and an opportunistic high setting of 75% stocks; it averages 50%.
(805)374-8118
199 West Hillcrest Drive Thousand Oaks, CA 91360-7892 -
MAP
Is Your Portfolio’s Thermostat Stuck On One Setting?
The thermostat in your home is set with a range of temperatures. When it gets hotter than the high end of this range, the air conditioning kicks in. When it gets colder than the low end, the heat comes on. You set it and forget it: the thermostat automatically reacts to changing weather conditions.
How awful would it be if your thermostat was broken? It might be stuck so that the heat is always on – even during a blistering summer. Or it might be stuck with the air conditioning always on – even in sub-freezing temperatures.
Your investment portfolio has a temperature-like setting, too. It’s called “beta” – it measures how much your portfolio moves up and down with the stock market. While many factors influence a portfolio’s beta, one of the most significant is the percentage of stocks owned within the portfolio. A higher stock percentage tends to lead to a higher beta – this means your portfolio’s performance will more likely resemble the stock market’s performance, both good and bad.
Like the temperature in your home, you don’t want your portfolio stuck at just one stock percentage all the time. Instead, you want it to vary within a range: you want a higher percentage of stocks when stocks are rising and a lower percentage when stocks are falling.
The problem: Equity managers tend to keep their portfolios “stuck” at a high stock percentage regardless of market conditions. In other words, most managers stay virtually fully invested; the difference between high and low settings is almost negligible.
The solution: the Managed Beta Account (MBA) changes your portfolio’s stock percentages – and thus its beta – as market and economic conditions change. Automatically. Non-emotionally. And all for one annual fee. The MBA “thermostat” has a defensive low setting of 25% stocks and an opportunistic high setting of 75% stocks; it averages 50%
OUR TEAM
ROCKY MILLS • Portfolio Manager & CIMA® (Certified Investment Management Analyst) • Senior Investment Management Consultant, Senior Vice President and Financial Advisor • 34 years investment experience • MBA, UC Riverside – graduated #1 in class; BA Economics, UCSB – magna cum laude • Lives in Westlake Village with wife of 34 years, Linda; member of North Ranch Country Club
LIN ANSCHULTZ • Senior Registered Client Service Associate • 35 years investment operations experience; 16 years with Rocky Mills
