THE PURSUIT OF ALPHA
Few investors have the necessary combination of ability, time, capital and control over an investment to create “alpha”. Regardless of experience, most investors have these goals in mind: ability to live on their portfolio’s income, saving for a child’s education or their own retirement and making sure their investments are first-rate. Tom Wiseman of Wiseman and Associates
Carl Richards, a writer quoted in the financial rags, calls this difference “the behavior gap.” Unfortunately, emotions can prohibit sound investment decisions and investors buy and sell when they shouldn’t.
For years I’ve been advocating that investors stop trying to catch “alpha”. I encourage investors to settle in and rely on an empirical approach, not based on speculation, but on the irrefutable science of capital markets. Investing in a globally diversified, tax and cost efficient portfolio will prevail. –Tom Wiseman
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WISEMAN & ASSOCIATES WEALTH MANAGEMENT 540-687-7077 wisemanandassociates.com
works. And, more recently, the offices have become child-friendly. Wiseman and his wife, Alexa, have a son, William, who is now 2½ and often can be found hanging out with his dad in the office. However, Wiseman added with a smile on his face, under no circumstances is William’s new pony, “Meatball”, to be allowed on the premises. When Wiseman speaks to one of the biggest challenges in helping people successfully manage their wealth, he grimaces slightly and says, “The biggest challenge is getting clients to realize that wealth management and estate planning is an ongoing process. It’s not like you can draw up a plan, put it in place and throw it in a drawer. Tax laws and wealth transfer variables are constantly changing and must be addressed regularly.” He adds that he finds nothing more disheartening than seeing a client’s life’s work, let alone generations of wealth, lost because of lack of vigilance in regular planning. The Wiseman & Associates move to Middleburg has been a great success in the support and expansion of their clientele. His team remains busy, handling investment management and leading the charge on estate planning and, in many cases, the transfer of a farm or a business on to the next generation. They’re all intent on developing strategies and custom approaches for clients for the most efficient transfer of wealth. On a personal level, the Wisemans have settled in the Middleburg area. Alexa is an accomplished, award-winning show jumper and horse breeder and is passionate about horses and the beauty of open space here in the Hunt Country. She plans to compete in the Upperville Colt and Horse Show the first week of June in the Grand Prix with “November” for sure, and possibly some green 9-year-olds—“Gringo” or “Ami.” As for William riding “Meatball” at Upperville, stay tuned. n
Most investors share the challenge of capturing the “return” of the capital markets, as opposed to generating their own “alpha.” Problem is, most investors never capture the market’s entire return. They don’t get the investment’s full return, rather the investor’s return. What’s the difference?
Alexa, William and Tom Wiseman
The term “alpha” has a lengthy Investopedia definition. In short, “alpha” is the excess return over an investment’s benchmark index return. Investors aim for “alpha”. Therefore, almost all investment advisors feel that they get paid to chase “alpha”.
L i f e
s an asset management late 1980s and early ‘90s, consulting for expert, Tom Wiseman has non-profits and municipalities, has been successfully led and grown invaluable. his team in support of many Wiseman’s experience during that clients in his Winchester period—managing pensions, endowments office for over 25 years. In 2012, to better and the application of life insurance stratserve long-term clients in Fauquier and egies tied to charitable giving—has turned Loudoun Counties, a second office was out to be of great value to many of his opened in the heart of Middleburg. mid- to high net-worth clients in the area These days, Wiseman splits his time over the years. between the Middleburg and Winchester The Wiseman offices in Middleburg, offices. He says he loves the challenge of just like the town, are warm and inviting. making certain that his clients and their They’re comfortably furnished, with an families get the most of their hard-earned approachable family atmosphere to disresources. His focus is on creating plans cuss and plan futures. that protect and grow wealth. On some days, his Great Pyrenees “After all, when you leave this world, Willa will be resting at his feet as he your things can only go three Alexa Wiseman will be among the riders expected to compete in the places—your $100,000 Upperville Jumper Classic on Sunday, June 7 heirs, charity, or Uncle Sam,” Wiseman said. “We try to minimize the last part.” Wiseman began his career on the institutional investment side, at a firm in Pittsburgh in 1986. The experience he gained in the
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Wiseman & Associates Finds a Noble Home in Middleburg