Asset Mix

The most important decision in controlling portfolio risk comes at the asset level – the mix between stocks, bonds and cash. We typically manage one of three balanced portfolio mandates. Each investment portfolio has a minimum allocation to stocks and bonds. There is also a maximum permitted allocation. The range between minimum and maximum exposures allows for actively managing risk through the business cycle.

The management of portfolio risk is a shared process. While our management style has a highly disciplined structure and we strive to mitigate portfolio risk, volatility cannot be eliminated. Clients must understand the volatility inherent in the asset mix ultimately chosen. A conservative portfolio will bring less volatility than a more aggressive one simply because there is a lower allocation to the stock market.

To successfully manage an investment portfolio, a disciplined approach to control portfolio risk is essential. We control risk by imposing minimum and maximum constraints on the cash, bonds, and stocks allocated for each balanced portfolio. Whether through active management, or in the event of extreme market movements, investment portfolios are rebalanced. We will simply not allow the portfolio to exceed a higher risk level than mandated. To us, this is just CommonSense Investing.

The Table below illustrates our various asset mixes: Conservative, Balanced or Moderate Risk.

The management of portfolio risk is a shared process. While our active management style has a highly disciplined structure and we attempt to mitigate portfolio risk, volatility cannot be eliminated. Clients must not abdicate this important financial decision with a “loose” investment mandate. It is imperative they understand the volatility inherent in the asset mix ultimately chosen.

To successfully manage an investment portfolio, a disciplined approach to control portfolio risk is essential. We control risk is by imposing minimum and maximum constraints on the cash, bonds, and stocks allocated for each balanced portfolio. Whether through active management, or in the event of extreme market movements, investment portfolios are rebalanced. A meaningful deviation from the imposed asset mix constraints is simply not permitted.