Focus on what you can control
Investing can be a challenging endeavor. There are several factors that determine the success of your investments. We believe in focusing on what you can control.
Asset Allocation
Market timing and securities selection are traditionally thought to be the primary drivers of investment return. However, Studies have shown that asset allocation is responsible for 91% of long term portfolio performance.
Asset Allocation
Diversification
Asset classes perform/behave differently depending on market factors and conditions. Diversification when done properly reduces the volatility of an individual portfolio by combining an individual asset class with other asset classes.
Range of Stock, Bond & Blended Total Returns
Source: Barclays, Bloomberg, FactSet, Federal Reserve, Robert Shiller, Strategas/Ibbotson, J.P. Morgan Asset Management.
Returns shown are based on calendar year returns from 1950 to 2019. Stocks represent the S&P 500 Shiller Composite and Bonds represent
Strategas/Ibbotson for periods from 1950 to 2010 and Bloomberg Barclays Aggregate thereafter. Growth of $100,000 is based on annual average
total returns from 1950 to 2019.
Guide to the Markets – U.S. Data are as of September 30, 2020.
Valuations
Valuations matters. Throughout market cycles, asset classes can become expensive or cheap. Your investments will be managed to take advantage of lower priced asset classes and avoid expensive ones.
Time in the Market, Not Market Timing
A recent study by DALBAR, a financial research firm, has shown how the general temptation for investors to try and time the stock market often results in the investor buying into the market at the top and fleeing at the bottom.
20-Year Annualized Return by Asset Class (1990- 2019)
Source: Barclays, Bloomberg, FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Bottom) Dalbar Inc, MSCI, NAREIT, Russell.
Indices used are as follows: REITs: NAREIT Equity REIT Index, Small cap: Russell 2000, EM Equity: MSCI EM, DM Equity: MSCI EAFE, Commodity:
Bloomberg Commodity Index, High Yield: Bloomberg Barclays Global HY Index, Bonds: Bloomberg Barclays U.S. Aggregate Index, Homes: median
sale price of existing single-family homes, Cash: Bloomberg Barclays 1-3m Treasury, Inflation: CPI. 60/40: A balanced portfolio with 60% invested in
S&P 500 Index and 40% invested in high-quality U.S. fixed income, represented by the Bloomberg Barclays U.S. Aggregate Index. The portfolio is
rebalanced annually. Average asset allocation investor return is based on an analysis by Dalbar Inc., which utilizes the net of aggregate mutual fund
sales, redemptions and exchanges each month as a measure of investor behavior. Returns are annualized (and total return where applicable) and
represent the 20-year period ending 12/31/19 to match Dalbar’s most recent analysis.
Guide to the Markets – U.S. Data are as of September 30, 2020.
Risk Profile
Each client we work with has a different tolerance for investment risk. We go through a questionnaire with you in order to determine your level of investment risk.
Preservation
Growth & Income
Aggressive Growth
There are 10 different risk profiles we use to start the conversation about the investment strategy that is right for you. Complete the risk profile questionnaire to start the process.
