Our KeepItSimpleStrategySM centers on what works according to academics and financial planners - diversification through asset allocation, dollar cost averaging and periodic rebalancing.
The custom KeepItSimpleStrategySM personal portfolio is tailored to help you achieve your financial goals. It combines traditional financial principles with prudent investment advice and cutting edge technology to create an investment plan designed to meet your needs.
At the heart of theKeepItSimpleStrategySM philosophy is the basic principle of asset allocation and diversification. There are different levels of volatility associated with assets that historically offer different rates of return. The volatility of equity versus fixed income, the volatility of small capitalization over large capitalization and the volatility of growth over value — seem to account for virtually all differences in portfolio performance.
The KeepItSimpleStrategySM groups investment asset classes (stocks, bonds, cash), regions (domestic, international), styles (value v. growth) and capitalization (large v. small). Since asset classes, regions, styles and capitalizations respond differently to changing economic trends and each other, they are combined into a portfolio whose goal is to balance the weakness of one with the strength of another.
The benefits of the KeepItSimpleStrategySM are many. The three primary factors in asset allocation are your objectives, risk tolerance and time horizon (how much time is needed to achieve a desired goal). Asset allocation is designed to help reduce your risk based on the level of volatility one chooses to assume.
We help you recognize and articulate your goals, assess your tolerance for volatility and scrutinize your current portfolio position. We can suggest the appropriate asset allocation strategy. Other factors include your marginal tax bracket and planned contributions or withdrawals are factored in, while being mindful of past performance, reviewing current market outlook, business & economic conditions. Based on your own preferences, we'll recommend specific investment products to help you reach your goals.
Keep in mind that there are no "risk-free" investments. When you make an informed decision to assume some risk, you also create the opportunity for reward. This fundamental principle of investing is known as the risk/reward tradeoff. Risk covers the whole spectrum of investments and includes:
a Market Risk –The possibility that share values will fluctuate in response to market conditions.
a Credit Risk – The possibility that a bond issuer may not be able to pay interest and repay its debt.
a Inflation Risk – The risk that a portion of an investment’s return may be eliminated by inflation.
a Interest Rate Risk – The possibility that a bond’s value will decrease due to rising interest rates.
a Currency Risk – The possibility that share values will fluctuate in response to changes in currency exchange rates.
a Liquidity Risk – The possibility of limited volume and frequency of trades for certain issues.
There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment.
