2194 Twain Avenue
Carlsbad, CA 92008
Tel: (760) 809-2700; Fax: (760) 931-6126
Email: info@schwabcapital.com

INVESTMENT PHILOSOPHY

"More efficient investment portfolios can be created by diversifying among asset categories with low to negative correlations"

 

-- 1990 Nobel prize winning economist Dr. Harry M. Markowitz

                                             (Father of Modern Portfolio Theory)

Investment Philosophy

Investment Philosophy Our investment philosophy is to provide opportunities for individual clients and institutions to achieve aggressive returns which are uncorrelated with the general movement of the underlying S&P 500 Index. We believe that the risk/reward scenario is favorable over a sustained investment period.

In addition to generating aggressive returns, the goal is to perform in a manner that is statistically uncorrelated to the performance of the S&P 500 Index. Therefore, for investors with a portfolio heavily weighted in U.S. equities, our Managed Futures Accounts can be utilized to attain the goal of decreased portfolio volatility.

Schwab Capital Advisor’s Managed Futures Accounts are suited to a client or institutional investor whose profile includes many of the following characteristics:

  1. Seeks aggressive returns relative to the S&P 500 Index.
  2. Has a longer term investment timeline for an aggressively managed account.
  3. An institution seeking to customize uncorrelated, aggressive returns within a diversified portfolio.
  4. A client who values asset liquidity relative to other non-traditional investments such as real estate, art work, pink sheet stocks, private equity or venture capital funds.
  5. An investor who understands the nature of the trading strategy and wishes to be able to profit regardless of   market direction.

Investment Methodology

Investment Methodology Our strategy at Schwab Capital Advisors involves the trading of options on the e-mini S&P Futures Index as its primary investment vehicle. We utilize a market neutral trading strategy where we do not attempt to forecast market direction, but rather derive profits as a function of the "time decay" of options by managing changes in underlying volatility.

The basic principle of our trading methodology is to write (sell) deep-out-of-the-money call and put options, and profit when the price of the options that have been written (sold) declines such that the options can be purchased for amounts less than the price at which those options were initially sold. Profits are also realized when options expire worthless, providing full profit on the original option premium sold. When initiating out-of-the-money "call" and "put" option positions, either the call or the put option positions are guaranteed to be profitable when the option reaches expiration, with the potential for both positions to be profitable. Trading methodology to adjust for variable market conditions is critical to our success and remain proprietary.

It is important to note that we do not "day trade", place "directional trades", or attempt to "time the market".

If requested, our trading strategies can be tailored to a more aggressive growth objective or a more moderate less aggressive objective. Either way, we focus on income with investment return targets based on the investment objectives and risk profile of an individual or institutional client. When we set up your account, we can work closely with you to determine your objectives.