Offered exclusively to clients, our Portfolio Review program helps you and your Financial Advisor develop the appropriate blend of asset classes for your overall investment strategy.
With decades of market activity to analyze and hundreds of studies to review, we now know the most important factor that affects investment performance isn’t the ability to time the market, anticipate global economic changes, or forecast investor psychology. In fact, more than 90% of a portfolio’s performance depends on a process known as asset allocation—the science of combining the right categories of investments in the right proportions for you.
The concept was originally developed by Nobel laureate Dr. Harry Markowitz of the University of Chicago. Large pension-fund managers and other institutional investors have benefited from this approach for years. Now individual investors are taking advantage of this methodology as well.
Source: Brinson, Singer, and Beebower, “Determinants of Portfolio Performance II: An Update,” Financial Analyst Journal, May-June 1991.
Proper asset allocation begins with diversification–making sure you don’t put all your money into one type of investment. Regardless of the percentages, a strategically diversified portfolio often includes a mix of:
These categories of investments are also known as asset classes.
Different asset classes react differently to the same changes in the world’s economy. The right mix is critical because it doesn’t matter as much how one particular investment performs, but how all of your investments perform together.
Diversifying your investments may reduce your portfolio’s volatility. Of course, no strategy can guarantee against losses in every conceivable investment situation.
When you take a strategic approach to investing, by diversifying your portfolio and taking advantage of asset allocation, you arm yourself with the tools of successful investors.
When you work with us, your Portfolio Review may include: