No investment portfolio can be properly managed without having first developed a written investment policy that will guide the process. This investment policy must reflect the unique goals, risk tolerance and constraints of the portfolio`s owner. The investment policy should include, at a minimum, investment return objectives (defined as a real rate of return), quantifiable risk tolerance, and manager evaluation criteria.
Asset allocation (i.e. the mix of stocks, bonds, cash, and alternative investments in your portfolio) is the single most important decision to be made in developing an investment policy.
Diversification by asset class, management style and time horizon are critical factors in determining the return of a portfolio.
No single manager, no matter how successful or famous, can be proficient in all areas of investments. For example, the best stock manager is rarely the best government bond manager. Careful selection of multiple money managers can reduce the risk and increase the returns of our clients portfolios. Therefore, we select the money managers who are best in their particular investment disciplines and then monitor the performance, organization, discipline and style of the managers.
A major cause of poor performance is excessive expense.
Market timing does not work.
We add value to our clients` portfolios well in excess of our fees by providing risk control and diversification through an asset allocation framework.
