Tony Bavedas and CIAPM: A Legacy of Trust in Investment Advisory Selling Covered Call Options Conservatively

Constitution Investment Advisory & Portfolio Management (CIAPM) founder Tony Bavedas shares his journey to helping others optimize their financial planning.

Shelton, Connecticut, Aug. 26, 2024 (GLOBE NEWSWIRE) — With over 100 years of combined experience, Constitution Investment Advisory & Portfolio Management (CIAPM) has helped clients achieve their financial goals. This has extended to serving the investment needs of individuals and families spanning through two, three, and four generations. However, the true success of this company is due to the visionary founder Tony Bavedas.

The firm’s clientele includes multiple generations of families. At the core of CIAPM’s investment philosophy is Tony’s son, Greg Bavedas, saying, “Clients should know what they own. Many investors hold many different mutual funds or structured products that obscure the true nature of their investments. People often pay high fees on these products in addition to the management fees for their portfolios,”. Instead, CIAPM focuses on individual stocks, primarily in large, well-established U.S. companies that can weather economic storms better than smaller firms and provide significant international exposure through their global operations. 

The firm’s personalized approach ensures that each client receives tailored advice and investment strategies that align with their specific goals. Greg carries a similar philosophy with a unique catchphrase ‘eating our own cooking’. The firm’s portfolio often mirrors what the Bavedas family themselves own. He says, “There is often an 80% correlation between what we own and what our clients own.”

What sets CIAPM apart from competitors is the selling of covered call options where there are many tax advantages. IRA account holders don’t pay taxes on the money coming into their IRA from call option selling. Also, Tony says the call option money taken into an IRA account is very helpful to an elderly person who is required to take minimum distributions yearly. 

In a taxable account, the money from call option selling is a short-term gain if the call option is not exercised. If it is exercised and the underlying stock has been held for a year and a day or longer, the sale of the stock, if at a profit, represents a long-term gain, and the call option money is treated as a long-term gain as well, no matter how long it was sold for. In addition, if an investor has a tax loss carry forward in his taxable account, that tax loss carry forward can be used to shelter or offset any gains from selling call options in subsequent years. However, Tony always recommends that investors check with their tax advisor.

Tony feels strongly that selling covered calls on large high-quality companies in a portfolio is one of the most conservative strategies used in stock market investing. He has said that a call option is a wasting asset, and therefore, if its underlying stock is not moving up in price enough to go above the exercise price of the call option by the call option’s expiration date, then the call’s value will waste away to zero. He thinks selling far out of the money-covered call options on a good stock portfolio is a lot more conservative than just owning the portfolio and not selling calls.  

In managing accounts, Tony will only sell covered call options for clients after they have been thoroughly educated about the possibility of an upside opportunity loss (if a stock moves up substantially above the exercise price of the option) and the bigger potential downside loss if a stock should fall in price. For clients to have a complete understanding, Tony also explains what motivates speculators to buy call options.

Tony thinks many more 501C3 non-profits should consider selling far out of the money-covered call options on the stocks in their portfolios. Many of them must distribute 5% of their assets each year, and therefore, the call option money would be helpful.

CIAPM is basically a portfolio management company but will sometimes write financial plans for clients, as Tony has been a Certified Financial Planner since 1979. He thinks how much money a person has at retirement time is most important. It is very difficult for someone with $500,000 to have as good of a retirement plan as someone with $5,000,000.

CIAPM does not invest in Bitcoin because it has no intrinsic value. Tony thinks anyone should think hard before incorporating reverse mortgages and the sale of their life insurance policies in their financial planning.

Tony Bavedas, founder of Constitution Investment Advisory & Portfolio Management (CIAPM), loved playing poker when he was in high school and college. At that time, he didn’t know anything about stock market investing because his family basically lived week to week financially. In college, he was an Economics major and was required to take a course on investing. His professor invited a local stockbroker to speak to his class. Tony thought it sounded like a great poker game and decided he wanted to secure a job with a brokerage firm. 

In the summer of 1967, firms weren’t interested in hiring a very young man with no experience or connections. After being turned down by nine firms, he was given an offer by the manager of the Merrill Lynch office in New Haven, Connecticut. The Merrill manager put him through a 2-year training program, where he did back-office jobs and worked as the sales assistant to the two most successful brokers in the office. In the fall of 1969, he attended the Merrill Lynch training school in New York.

He was finally a registered representative in January of 1970. As a result of working for Merrill Lynch in New Haven, Tony got to know some members of the Yale University community. He ended up having several Yale professors as clients, including four Department Chairmen. One Yale Medical School student started doing business with him in 1971 and is a retired doctor still doing business with him today.

Today, Tony has his own Registered Investment Advisory (RIA) firm called Constitution Investment Advisory & Portfolio Management (CIAPM). In managing portfolios for clients, his team is oriented toward the objectives of income and growth. Each account has a mixture of high-quality, low-beta value stocks, some U.S. Treasury Bills, and a few of the magnificent seven companies.  

As CIAPM looks to the future, the firm is well-positioned to continue its legacy of excellence under the leadership of Tony’s son, Greg Bavedas, Senior Vice President and Managing Director.

Media Contact:
Name: Tony Bavedas

Email : tony@constitutioncc.com