Inside the Investment Philosophy of NewEdge Wealth

The Big Picture in Practice podcast team welcomed Cameron Dawson, chief investment officer for NewEdge Wealth, to discuss the firm’s core investment philosophy and their approach to asset allocation. 

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NewEdge Wealth gets to the heart of “why” in their investment philosophy. “It really is about informing clients about what they own and why they own it,” Cameron said.

NewEdge Wealth’s investment ideology zeroes in on a disciplined and opportunistic approach, tailoring financial strategies to meet the unique needs of each client. This approach ensures that risk-return decisions are balanced and ideal for the individual investor.

“We take into account the entirety of who they are, the liquidity needs and the emotional needs of staying invested," Cameron said. "And that leads to seeking out the best opportunities wherever they come from.”

One thing that Cameron stresses about wealth management clients is that they don’t belong to an amorphous bucket of people who all adhere to one belief. Investment philosophy is informed by the wealth strategy of any given client. And when that isn’t taken seriously, things can go off the rails.

“I think that the worst thing that we can do is walk into an initial client meeting and abruptly tell them to make changes to their investments without understanding who the client is and what they need,” Cameron said. “And that’s important for very complex clients. They shouldn't be getting everything off the shelf. Some things can be off the shelf, and sometimes it makes sense to pay up for active management. But at the same time, being able to integrate with wealth strategy is absolutely central to what we do.”

In our current market environment, active management has taken a front seat. “The role of active management cannot be overstated, particularly in value, international, and small-cap sectors,” Cameron said. “It's about adding that extra layer of value to our clients’ portfolios.”

NewEdge Wealth looks to incorporate alternatives in portfolio construction where there are structural advantages. “Those structural advantages can create return streams that are either enhanced or differentiated enough that it is worth paying up for fees to get access to those,” Cameron said.

In Cameron’s view, selectivity and due diligence in private markets are crucial to portfolio contruction.

Recent market volatility demands a great deal of discipline. It’s very easy to chase the hot trend and think that there’s no risks. But eventually volatility will kick up, and discipline will be an investor's strongest ally.

“We want to continuously train clients to think about downside volatility,” Cameron said. “If we have a plan in advance, we’re much more likely to execute that plan rather than get scared when volatility surges.”

Cameron anticipates a change of form and function for alternatives in investment portfolios.

“On the form side, I think that we will continue to move to have more and more alternatives as the alternative space comes around to the idea that a wealth client will be different than institutional,” Cameron said. “And when I say function, I think that technology will continue to play a larger and larger role in how we build portfolios.

She envisions tech that allows for greater customization and integration into the wealth strategy with advances in big data and artificial intelligence.

In the world of investments, the only constant is change. 

“The ever-changing investment landscape demands us to stay vigilant and adaptable,” Cameron says. “The future belongs to those ready to embrace change and capitalize on it in a manner that serves their unique investment goals.”