The Concept of Diversification
The investment process we employ in portfolio management is guided by the principles of Modern Portfolio Theory (MPT). Utilizing MPT as a strict guideline, we are able to emphasize on the reduction of market-based volatility through efficient allocation of portfolio assets among statistically optimized asset classes; at the same time focusing on minimization of cost by using Exchange Traded Index Funds (ETF’s), which offer a low cost, low turnover and asset class specific funds.
In today’s volatile market, the influence of MPT stresses the importance for Financial Advisors to aid clients to construct portfolios that will provide steady and consistent income while maintaining or increasing the principal investment.
- Provide regular payment stream while maintaining/increase principal balance
- Rely on different sources during various economic and market cycles
- Diverse source of income drawn from robust list of Asset Classes
- Improve Diversification
- Gain exposure with use of Mutual Funds
- Expand Income Opportunity
Strategic and Tactical
Our asset allocation strategy combines the strengths and benefits of a core index and satellite methodology.
Asset classes are selected or eliminated based on an individual expectation of their ability to add value over time by improving returns while reducing risk.
Each strategy evolves over time, is monitored regularly, and adjusted by implementing specific strategic and tactical asset allocation changes, buy/sell decisions.
We invest in any combination of ETF’s, actively managed mutual funds, managed futures, REIT’s, MLP’s, and commonly preferred stocks.
Diversification does not guarantee investment returns and cannot eliminate market risk or investment losses.