My over 30 years of hands-on experience in both fixed income and equities is the single most important qualification.

For 10 years I was at Credit Suisse (then called Credit Suisse First Boston) and for eight of those years I was in the fixed income department advising Fortune 100 companies on a variety of fixed income issues. So I bring a deep understanding of bonds, which play a critical role in overall individual wealth management. In addition to becoming expert in the mechanics of the fixed income markets, I also learned the value of economic analysis, how to think critically about macroeconomic issues, and the impact of monetary policy on investments.

I switched to equities in 1996 and began managing client funds myself in 2000, rather than gathering assets and allocating them to third-party managers. I wasn't satisfied with the risk management strategies they offered and thought that equity markets had become too far disconnected from economic reality. I thought, correctly, that there was a very high chance for a severe market correction, and the managers had no means to control for that as they were required to be fully invested and didn't hedge.

So I bring a unique combination of extensive fixed income and hands-on equity management to my clients. In what has been a most difficult period, I have been managing my clients' assets successfully and have demonstrated that I can protect my client's wealth in good times and bad.

There are two main reasons. First, the prevailing culture and priorities at many of the larger firms, especially with regards to private wealth management, are just too divergent from my own. For example, one of the core principles of Peattie Capital is that I will always act in my client's best interest. In contrast, the major banks and brokerage firms are only held to the much lower standard of "suitability".

Secondly, being independent allows me to survey and access a broad range of research and services from anywhere, rather than being beholden to the products of any one single firm. This is an important benefit to clients because it means that I can search for the very best solutions for them.

Some prospects have asked if they might be missing out on some of the services that a larger firm would bring. The answer to that is that PCM is a client of Schwab Institutional, which provides all the support and resources that any major firm would. So my clients and I are getting the best of both worlds. As Schwab says, and I agree, PCM is independent, but not alone.

I think it is useful but limited.

Starting out with a fixed income/equity/real estate split may be fine, but allocating between style boxes within the equity component has definite limits which are not fully understood by investors.

People believe that an asset allocation program is the best way to manage their wealth, because they think it diversifies away market risk. I disagree, and hereby warn you that, if you have such a program and expect it will protect your wealth in a down market, you are mistaken. In a down market, equity correlations go to one, with the result that your overall returns will mirror the market, broadly speaking.

Important Reading: Article in the Financial Times by Anousha Sakoui and Izabella Kaminska "Stock picks tough as asset paths correlate" (requires free registration)

For example, in 2008 it didn't matter what exposure you had to international, domestic, growth, value, large cap, or others. Covariance between the asset classes and styles turned out to be much greater than previously believed.

Given the trends I see now, such as dark pools and high-speed electronic trading, correlations will increase even more. As much as 70% of the share trading volume on the US exchanges is now high-frequency trading, according to a June 7, 2010 article in the Financial Times by Michael Gordon "Exchanges are coming close to the edge" (requires free registration)

The most important limits to an asset allocation program are that it does not diversify away market risk, and it cripples the ability to take advantage of imbalances and short-term opportunities as they arise. Increasingly, intelligent investors are questioning the value of an asset allocation program.

The biggest beneficiary of an asset allocation program is actually the selling firm, due to the steady fees these programs generate. Investment banks, in particular, have unpredictable and lumpy business models, which is why they tend to trade at a lower market multiple. The fees from asset allocation programs help smooth out revenues for them. They are publicly traded firms whose compensation programs often involve shares, and thus they are highly motivated to do whatever they can to make their share price rise.

In the past, many brokers and investment advisors within an investment firm had discretionary investment authority over some portion of a client's assets. When these firms became worried about their liability should any of their brokers commit infractions or criminal acts, they began emphasizing the asset allocation model. Their brokers and advisors initially collect the funds, but via an asset allocation program, the funds are then farmed out to third party managers to invest. In addition to smoothing revenues, this removes legal and public relations risks the firm might experience.

Registered investment advisors, such as Peattie Capital, are required to always act in the best interest of their client, whereas brokerage firms are not. The brokerage firms have been lobbying to make sure that language requiring them do so is excluded from the financial reform bill being debated during summer of 2010.

No, but my most valuable investing lessons come from Pat Duff's investment class at Columbia Business School where I learned the importance of doing extensive research about a company and also the value of independent thinking. Duff was a recently retired partner at Tiger Asset Management when I took his class in 1996.

I am also a big fan of John Maynard Keynes because of his successful transition from being a "macro" investor to becoming a stock picker.

Every client has access to his/her account via schwaballiance.com, and can log in and see or do anything they want 24/7. In addition, representatives from Schwab Alliance are available at 1-877-575-2157 during normal business hours.

PCM's sole compensation is the management fee. I send an invoice quarterly and ask clients to mail a check.

There are no incentive fees or lockups. The money is yours and you can have it any time you want it.

In addition to PCM's management fee, there are commissions on every transaction, paid to Schwab. PCM does not participate in the commissions.

PCM and the client can enter into a limited power of attorney, which provides PCM with discretionary investment authority over an account held somewhere else. In this case, any commissions go that that firm

If you are 100% satisfied with every aspect of the services and performance you are getting then you shouldn't bother with PCM. On the other hand, more and more intelligent investors are questioning those services on the basis that

a) they don't believe the other firms always act in the best interest of the clients,

b) the "asset allocation/diversification" model that is widely touted at the major firms has been coming under increasing scrutiny because of its poor performance, especially during downturns, (how did it work for you during 2000-2003 and 2008-2009?) and

c) Clients want to have a direct relationship with the portfolio manager, not just a representative.

Ideas can come from anywhere, and if I want to discuss them with someone else I have an extensive network to draw on, built up during my over 30 years in the industry. Also, several clients have had important roles in industry, and they can provide insight as well. I have access to the daily research of several major Wall St. firms, and through Schwab, some independent research firms as well.

I also follow a number of strategists and analysts such as Jeremy Grantham, Don Hays, David Rosenberg, Jim Grant, Richard Russell, Whitney Tilson, Elliott Gue, and Bill Gross for example.

There's no shortage of information; more important is to be able to identify important information from fluff.

Portfolio construction is entirely dependent on the goals and situation of each client. That said, I tend to be somewhat concentrated, with typically 20-25 positions per portfolio, and the biggest say, three or four positions typically 30-40% of the portfolio

There are no industry limits. I believe in being flexible and, to a degree, opportunistic. For example, if I think oil is going to double, I might have 8-10 oil-related names, totalling 30%-40% of a portfolio. But again, it depends on the goals of the client and his/her situation.

As to position limits, I will buy up to 10% of a portfolio in a single name, but only when I have the highest possible conviction and there is enough liquidity. I don't let anything grow beyond 15-16% of a portfolio.When I short, I typically limit positions to 2% of a portfolio.

There really is no such thing. Clients range from a single mother with no financial experience to another professional money manager who has been in the business for over 40 years. And their range of net worths is from $2mm to well over $100mm. About half my clients are current/former finance professionals, so I like to think that people who understand our industry from the inside trust my judgement and integrity.

A number of clients have been with me since the 2000-2003 downturn, so I tend to bring stability and loyalty to the table and clients know that I will always act with their best interest at heart and can provide customized and competitive solutions to their needs.

To emphasize that I manage separate accounts....everyone is different and I'm trying to create something that addresses their unique needs. I am trying to make it as personal an approach as I can. No one's getting lumped in with anyone else here or sold the flavor of the day. It's all about doing what's best for each individual client. Plus, I like the alliteration, I think it's alluring.

To provide the best possible service I can; to always act with integrity and in the best interests of my clients; to create as "user-friendly" experience as I can, and to have as open and transparent approach as possible. From a market perspective, to always protect client assets from a meaningful decline in value and for PCM my goal is to grow to $100mm assets under management.

I would think I could handle up to 25 clients or so without sacrificing service or performance, which will always be paramount to me. In terms of assets, I'm not sure where that gets me because, as I mentioned, several people I'm involved with have extreme wealth.

It might be that I bump up against an assets limit before I get to 25 clients, and if that's the case then I'll reevaluate my business model and perhaps hire a bigger team or perhaps just stop where I am.

For the time being I am very happy being a one-man show.

Again, that depends on the goals of the portfolio. My favorite reasons to short are that a company's management has failed to adapt to a new environment, say like newspapers when the internet took off.

Secondly, there are times when a company is going to miss numbers and usually that will lead to some selling, sometimes severe, depending. But that is a bit trickier and and it's hard to consistently predict how the market will respond to any one single piece of news.

Third, there is valuation, but by itself valuation is a just too dangerous a reason to short...things can carry on for a lot longer than is reasonable. So shorting is used judiciously.

Hedging is more common. With ETFs, it's fairly straightforward to buy an inverse fund, or short an ETF as a hedge against a long underlying exposure to a name or several names in an industry. As an example, I have owned several of the major money center banks so if I wanted to hedge this exposure I might buy an inverse fund in the industry or short a few different names. None of these strategies is risk free and you've always got to be very careful about what asset or instrument you own; so having been a pilot and "flying people's planes" these past 10 years really helps here. From time to time I box positions as well.

Well, having a hedged approach makes a lot of sense, but you have to be careful and really know the environment. One of the reasons I became excited about the markets' prospects in the spring of 2009 was because I read about a lot of long/short funds being opened up, that were going to be up to 30% or 40% short, by mandate. Talk about closing the barn door after the horses are gone! At some point that may make sense but it was ineffective, at best, since the rally began in March, 2009.

I began talking to people last summer about re-allocating a portion of their fixed income assets into something that was reasonably (if there is such a thing) safe and also provided a better return than what was available in the fixed income markets. Master Limited Partnerships (MLPs) are a logical choice, because of their generous dividends, and the tax advantages that come with those dividends. Plus, they had been sold off with everything else in the great redemption trade of 2008-early 2009, and there was some real value there. So they are a significant portion of the income accounts.

I have also owned a few bank preferreds and may buy a bond or two as well. As always, you have to do your research and be careful about what you buy. I was fortunate because Barron's had a big cover story on this very topic late last year which didn't hurt my marketing. And, I spent eight years of my career in the fixed income markets (at Credit Suisse in the 80's) and so I'm familiar with bond math, and how much value your bonds can lose as interest rates rise.

If rates rise, there could be some real pain, doubly so because of the emotional impact of seeing your "safe" assets decline in value. Of course, if you hold the bond to maturity and it pays off at par then you're fine, but, broadly speaking, I don't think people understand bonds and that's another reason my eight years experience on a fixed income desk helps here.