What is Asset Allocation?

Strategic Asset Allocation is an investment strategy that attempts to balance risk and reward by adjusting the percentage of stocks and bonds in a portfolio according to an investor’s risk tolerance and time frame. We strongly believe that asset allocation is the main factor determining investment returns.

Our Asset Allocation portfolios contain a mix of stocks, bonds, and cash and seek to deliver income, growth, or a combination of the two to a wide range of investors.  We have developed a wide array of model portfolios to meet the needs of unique needs and varying account sizes of our clients.

While we prefer active managers, we also offer portfolios comprised of passive investments (typically ETFs) for investors who prefer this approach.

Active Management

Active management is the use of portfolio managers to research, evaluate, and buy and sell securities in an attempt to earn returns higher than the market.  We practice and utilize active management and active fund managers because we believe it adds value over the long run versus passive investing – also called benchmarking or indexing. We choose managers with different yet complimenting strategies to build diversified portfolios in order to take advantage of market disconnects when they appear. The active managers we select typically share our view that owning a stock is owning a piece of a business and our belief that a business’s value and its stock price can become disconnected from time to time. They typically do not attempt to forecast the direction of the markets but rather focus on buying securities when they trade below their “true” value.

Diversification to Help Reduce Risk

We diversify our client’s portfolios both between stocks, bonds, and cash and also within each category.

We diversify our stock portfolios among Valuation and Company Size and typically hold investments in all stock categories. We also diversify our bond portfolios among several types of bonds.

Diversification reduces the risk that any particular investment will have a large adverse impact on the portfolio.

The Art and Science of Fund Selection for Better Performance

We add value by choosing several proven active managers for our portfolios and utilize managers that employ different yet complimenting strategies.  We select the best managers from each asset class and utilize many fund families to diversify strategies, processes, investments, and economic outlooks. Our managers typically have over 10 years of solid performance, repeatable and understandable strategies, and flexibility in each asset class.

Although we believe in and practice active investment management, we understand that not everyone does.  We offer portfolios comprised of passive investments for clients who would like to benefit from our planning process and strategy but prefer passive investment vehicles.