FAQS
Questions About Our Wealth Management Services
We Have the Following FAQs
Explore answers to common questions about our services, process, and support.
How We Work
Q: How many positions do you hold?
A: Each equity portfolio holds approximately 30–35 positions. Few enough to maintain a low correlation and move the needle, but enough to diversify from unsystematic risk.
Q: Do you invest in International stocks?
A: Yes. Out of the approximately 1,700 positions in our selection universe, we follow about 300 ADRs under consideration. This allows our international exposure to be traded on U.S. exchanges and denominated in U.S. dollars.
Q: How are taxes treated in your strategy?
A: Our investment methodology lets the winners run and cuts out the losers quickly. In taxable accounts, this is intended to generate gains and short-term losses.
Q: How much turnover occurs?
A: Our annual turnover ratio is approximately 100%. We hold about 30 positions and place about 30 trades annually. Most of the activity is replacing positions that fall out of favor.
Q: How often do you meet with clients?
A: Since we have a low advisor/client ratio, we tailor a service model that fits each client. In addition to quarterly review meetings, clients can participate in various company events (in-person and virtual) where you have direct access to the Portfolio Managers making the decisions in their account.
Potential Client Questions
Q: How does active management affect taxes in my non-tax-advantaged accounts?
A: In non-tax-advantaged accounts, active management can create taxable events, but our process is designed to be tax-conscious. At CooksonPeirce, we seek to primarily generate long-term capital gains and aim to rarely realize short-term gains. When short-term losses occur, we harvest them strategically to help offset realized gains. Our momentum-based approach involves buying and selling to capture market strength, but we manage turnover intentionally. We coordinate with your advisor to align our approach with your tax situation and long-term plan.
Q: Does active management result in higher fees?
A: When comparing active to passive strategies, it’s important to look at total costs. Schwab extends the $0 commission rate on the purchase or sale of individual stocks to our clients, so you avoid embedded expense ratios that come with funds or ETFs. Our advisory fee is a competitive 1% of assets under management, which is lower than many firms, and it includes comprehensive financial planning. We also use a tiered fee schedule with breakpoints for higher account values and by asset class.
Q: Aren’t risks higher with a smaller, less diversified portfolio?
A: Some assume fewer holdings automatically means more risk, but our process is designed to manage that. We re-run stock rankings weekly and can make trades as quickly as weekly. This means we can exit a position much faster than managers who review quarterly or annually. Our strategies target 30–60 stocks, enough to diversify while still concentrating in areas of strength.
Q: Aren’t ETFs safer?
A: ETFs may offer broad exposure and low costs, but “safer” depends on how you define risk. Many ETFs track indices where a few very large companies dominate, introducing concentration risk. They also hold both strong and weak performers, which can dilute returns. By contrast, our portfolios are diversified across hand-selected stocks that meet strict performance criteria, and we adjust holdings as trends shift.
Q: Is CooksonPeirce only good for high-risk-taking / aggressive clients?
A: No. Our momentum-based process is adaptable to any risk profile—conservative, moderate, or aggressive. Conservative investors may choose lower-volatility or equity-income strategies; aggressive investors may tilt toward higher growth. In every case, portfolios are built to match your comfort level, goals, and plan, in collaboration with your Schwab Financial Consultant.