Broker Check

Our Philosophy

Financial Advisor, Wealth Management - New Orleans, Louisiana

As a branch office of LPL Financial, the largest independent broker/dealer* in America, we have access to one of the finest research teams in the industry. However, unlike many brokerage firms who make markets in securities, conduct investment banking, or create products through financial engineering, LPL Financial is able to remain objective in their assessment of investments by relying on third party firms for security research and on products developed by other companies. We choose to be aligned with LPL Financial because we believe they offer the best opportunity for our clients, supporting our commitment to independent objective investment advice.

Watzke Financial employs a multi-tiered approach to managing client assets beginning with an assessment of a client’s tolerance for market volatility. While it is true that historically over long periods of time, many securities have offered positive returns, stock investing does involve risk including the potential for loss of principle. Some clients are simply not comfortable with large fluctuations in their asset accounts. In addition, others understand the normal volatility of the market, but their point in the life cycle does not allow the time for recovery (as in approaching retirement or during periods of uncertainty). We determine a clients comfort with and tolerance for risk, and balance that with the true need for returns. Once established, we match the client’s goal with an appropriate strategy.

We advise our clients based upon well known principles of asset allocation, employing multiple asset classes designed to help manage some form of risk. We will typically suggest a variety of stocks, bonds, and other investments. Alternative investments may also be used where appropriate.

Once allocation percentages are determined, specific investments will be chosen for each asset class. Traditionally, we utilize diversified portfolios of securities including: stocks, bonds and other investments. However, third party money managers may also be utilized when appropriate. We are typically able to effectively diversify and address our client’s goals using a variety of investment vehicles.

Once a particular strategy is matched with the client’s personal objectives, we determine the appropriate allocation based upon the long-term historical results of each asset class. However, as markets become more mature or show signs of uncertainty, tactical changes are made to reflect the changing market.

Finally, there are times when certain asset classes may not be in favor at all and no reasonable alternative exists, such as recently when all equity classes were declining to historic lows. We utilize a sophisticated analysis system designed to help identify these periods, so that appropriate action can likely be taken. In some cases, funds will be held in cash or cash alternatives until such time that the situation improves and the asset class shows signs of opportunity.

While no system is perfect, and past success cannot determine if success will be achieved in the future, we believe such an approach to investing offers our clients many benefits and is summarized as follows. First, we manage risk through traditional asset allocation. Second, we utilize investments to provide diversified portfolios of securities for each asset class. When available, asset managers may be used in place of other investments if appropriate. Third and lastly, we may hold increasing amounts of cash or cash alternatives when the markets show signs of deterioration or increased risk, in an effort to preserve portfolios.

For clients who prefer a less actively managed approach, we will likely follow the same strategy, except cash levels will not be adjusted based upon market volatility. Therefore, some clients will remain invested throughout any positive or negative periods in the market. Such an approach does offer some benefits, such as potentially reduced costs typically associated with active management (buying and selling securities regularly), reduced taxes by not realizing capital gains through selling, or potential increased returns due to being invested at times of growth (if slow to re-enter market early in recovery). However, during periods of decline, excess losses might be experienced in comparison to the active strategy, although the active strategy may also experience losses.

While we believe the more active approach is preferable for most clients, especially those approaching retirement, we will employ the strategy chosen by our clients and that is appropriate for their situation. We believe our role is to carry out the wishes of our clients.

*Based on total revenues, as reported in Financial Planning magazine, June 1996-2016, based on total revenue.

**Alternative investment strategies may not be suitable for all investors. Strategies which employ the use of alternative investments may accelerate the velocity of potential losses.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

No strategy assures success or protects against loss.

Asset allocation does not ensure a profit or protect against a loss.

There is no gurantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.