By combining a broader variety of assets that have little to no correlation to one another, we can reduce downside exposure right out of the gate.
Our core portfolios serve as the baseline for our private client relationships. We start at the beginning, seeking to fully understand your current financial reality, your long-term goals and objectives and what it’s going to take to get you there. From this roadmap we develop a core asset allocation that emphasizes true diversification, low expenses, tax efficiency and risk-adjust return.
Beginning with a truly diversified portfolio is the first step in executing a good defense. The traditional definition of diversification is very broad and overarching. An all equity portfolio might be pitched as "diversified" if it holds stocks across multiple styles (value & growth), market caps (small, mid, & large), and potentially even geography (international & domestic). Despite their differences, the correlation across these categories is extremely high and provides little in the form of true portfolio-level diversification. In other words, holding more of the same does not make you diversified.
Our portfolio construction methodology extends beyond stocks and bonds to include additional asset classes such as commodities, gold and real estate that exhibit much less correlation to each other, thereby adding true diversification. By combining a broader variety of assets together, downside exposure and expected volatility is reduced right out of the gate. A portfolio built on this foundation has a better chance of weathering turbulent market environments and producing better performance over full market cycles. Over time, additional value can be added through timely rebalancing, tax-loss harvesting and careful asset location for maximum after-tax returns.