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Paul W Abele assists successful individuals who demand excellence from their investment professionals. Our goal is to be your personnel Chief Financial Officer (CFO).We use a comprehensive approach to meet client needs. We use a highly consultative approach using some of the best professional in Birmingham, CPAs, and Estate Attorneys etc(Professional Network). We use the professional Network along with our wealth management practice, to construct integrated strategies for each client’s specific needs.
Modern Portfolio Theory and the Prudent Investor Rule:
The Nobel Prize for Economics was awarded to Harry Markwowitz, Merton Miller, and William Sharpe in 1990 for their groundbreaking work in Modern Portfolio Theory. MPT focuses on creating portfolios based on their overall risk-reward characteristics instead of selecting securities that each individually have attractive risk-reward characteristics. Applying MPT in our firm, we attempt to optimize the risk/reward ratio of an entire portfolio, matching your portfolio to your goals and risk parameters.
Prudent Man Rule
45 states which include Alabama, the District of Columbia, and the US Virgin Islands have adopted the Uniform Prudent Investor Act.
Economic evidence shows that, from a typical investment perspective, the major capital markets of this country are highly efficient, in the sense that available information is rapidly digested and reflected in the market prices of securities."
As a result, fiduciaries and other investors are confronted with potent evidence that the application of expertise, investigation and diligence in efforts to “beat the market' in these publicly traded securities ordinarily promises little or no payoff or even a negative payoff after taking account of research and transaction costs. Empirical research supporting the theory of efficient markets reveals that in such markets skilled professionals have rarely been able to identify under-priced securities (that is, to outguess the market with respect to future return) with any regularity. In fact, evidence shows that there is little correlation between fund managers earlier successes and their ability to produce above-market returns in subsequent periods. '‘
Reporter's Notes, p 75, The American Law Institute, Restatement of the law, Trust, Prudent Investor Rule, 1992
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