Asset Allocation

Asset Allocation
Identifying Opportunity. Navigating Risk.

Asset Allocation: The Foundation Of a Sound Investment Strategy

Asset allocation—how your assets are invested among equity, fixed income and opportunistic securities—is the foundation of a customized investment strategy that will meet your long-term objectives.

There are two types of asset allocation: strategic and tactical. Each contributes to investment returns and helps manage risk in different ways. We’ll spend a lot of time with you to determine your initial strategic allocation, and then actively manage your total portfolio with short-term tactical allocations. We review your strategic allocation at least once a year to make sure it’s still appropriate for your objectives.

Strategic Asset Allocation

This is the first step toward creating an investment strategy designed to maximize your long-term return and minimize risk. Think of it as the optimal long-term target for your asset mix that will be memorialized in your personalized Investment Guidelines with us.

During our goals-based wealth planning discussions, we’ll help you identify the best strategic asset allocation for you, based on a combination of personal factors:

Current financial situation
Goals and objectives for today, retirement and legacy
Time horizons to achieve those goals
Current and future liquidity/income requirements
Risk tolerance: conservative/aggressive
Current and future tax situation

Tactical Asset Allocation

Once your strategic asset allocation is established, we use tactical allocation to shift assets between asset classes to take advantage of short-term market opportunities, manage risk and/or rebalance your portfolio. These tactical shifts typically stay between +/-10% of your strategic allocation target. Portfolio turnover tends to be low, and we use tax-efficient techniques during periods of significant rebalancing to manage the tax consequences of purchases and sales.

Ongoing Review

Life doesn’t stand still, and personal circumstances can change. We are proactive about staying in touch with our clients and periodically revisit the question of whether their strategic allocation still aligns with their needs and objectives. In addition, we do a formal planning and investment review session with every client at least once a year.