Personal and business investment strategies
Our analysis will examine four primary components of your current portfolio. The purpose of the overall analysis is to identify areas of strength in your current portfolio structure as well as any areas that need attention. Any action plan developed from this analysis should take proper care to preserve any areas of strength when resolving any shortcomings. The four components examined are outlined below. The appropriateness of your asset mix is dependant on several factors. These factors include overall investment horizon, tolerance and attitudes towards investment volatility, level of investment knowledge and current financial situation. This analysis will examine the appropriateness of your current asset mix. Proper diversification of your portfolio will reduce and can potentially eliminate the unsystematic risk of your portfolio. This risk does not improve your expected return so your portfolio should contain as little of it as possible. The three most effective areas of diversification are examined in detail.
In this section we analyze the security mix inside of the broader asset class category. We will look at individual investment funds and potentially individual securities depending on the composition of your portfolio.
- Geographic Dispersion:
It is important to diversify your investments by country when creating a portfolio in order to limit your exposure to only one area of the global marketplace. At the same time, including foreign content in your portfolio must be done cautiously because of the extreme volatility inherent in these markets.
- Management Style:
Management style refers to a specific set of attributes characterizing a fund manager’s investment decision-making process. Each style is positioned to perform well at different stages of the economic and market cycles so it’s important to have exposure to several styles in your portfolio
- Tax Efficiency:
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Two areas that can make your portfolio more tax effective are the dispersion of ownership of the assets and how the fixed income is structured inside of the overall portfolio. Both of these areas will be analyzed.
- Performance:
Ironically this is the fundamental criteria on which most investors build their portfolio. Unfortunately short term volatility combined with the limited window of evaluation provides very little relevant information on which to base an investment decision. Regardless, your major holdings will be reviewed on both return and risk over the past three years.
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