Actively Managed Optimal Allocation Strategy

Several well documented studies have shown that as much as 95% of the performance of a well-diversified investment portfolio is directly due to the asset allocation of the investments it holds.  When asked how he was so successful, the great hockey player Wayne Gretzky replied that it was really very simple: “You just have to make sure you put yourself where the puck is going to be”.  That is our focus with regard to managing our client’s investments.  We don’t want to be positioned for where the market is or has been, we want to be ready for where it will be in the upcoming stage of our macroeconomic model.  An optimal portfolio maximizes returns by combining this analysis with the individual client’s risk tolerances and comfort level.  Our goal is to find the unique optimal investment allocation for each client, and to actively manage that allocation in order to adapt to changing economic and market conditions.  

Being a smaller investment advisor gives us an advantage in this area.  It gives us the ability to move quickly in whatever direction is required in order maintain that optimal allocation.  In terms of sudden stress and spiking risks, it also gives us the ability to hedge out of positions very quickly should the need arise.  Thanks to the many different trading tools available today, we can hedge entire portfolios of virtually any size with a single trade rather than having to work out of positions slowly, and expensively, in order to minimize the market impact.