Investment Planning

The Power of Asset Allocation

One of the most significant factors influencing portfolio performance is asset allocation. By dividing your investments among many basic categories, stocks, fixed income, cash equivalents, bonds, and other tangible assets, you can reduce your exposure to extreme highs and lows in performance. Harry Markowitz won a Nobel Prize in Economic Science (1990) for his modern portfolio theory (MPT). This research into asset class behavior and portfolio theory greatly influenced the financial world. These in-depth analyses are based not only on historical return and the volatility of individual securities but also on overall portfolio performance result.

How your investments are allocated is more important than individual investments in a diversified portfolio. The process of selecting your investment mix encourages you to consider all factors: financial need, risk tolerance, inflation, taxes, interest rates, and the current economy.

When you diversify, this means that you spread money between different investments. In asset allocation, diversification is taken to another level. We further diversify your portfolio into different investment classes. Even though this still involves some level of risk, your ultimate goals should be to maintain and ultimately increase your investment returns while managing the risk involved.

When developing your asset allocation, our investment strategy will help you benefit using the following factors:

• Preserving your capital

• Increasing your liquidity

• Reducing your risk

• Quarterly reviews

• Working efficiently under changing market conditions

• A systematic list of your assets readily available at all times