Read this Periscope to learn about how we build an asset allocation, choose between investment strategies and build your portfolio.
Expert Network Team Podcast
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Mike Miller CPA tells a story about a friend who made it through the economic shutdown from the pandemic because of his strong balance sheet. Mike shares questions to ask yourself as you think about your finances. Learn a practical idea about planning for what to do when business income declines. Mike shares the four elements of a strong balance sheet. Learn rules of thumb for a “rainy day fund” and what lenders look for in companies. Learn about “negative net worth” and how to keep a forward focus when you’re looking at financial statements.
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The Importance of Asset Allocation
If we are careful in setting your long-term investment objectives, then we will be more successful in planning your investments. Once we have worked with you to determine your time horizon and risk approach, we begin the task of building your investment portfolio. The first step in this process is asset allocation.
Asset allocation is the process of deciding how much of your portfolio to invest in different investment types, or asset classes. The most basic asset allocation choice is between equities and fixed income, also known as equities and bonds. Equities allow you to participate in the long-term growth of companies and the economy. Bonds are fixed obligations of governments and corporations.
Equities are partial ownership units of a company, whereas bonds are loans made by a company or government with a promise to repay the principal plus interest. The asset allocation may include short-term investments, foreign equities and bonds, and alternative assets. These have a large effect on your long-term, total return.
Read more about our academically proven investment advice process.
Once you have determined your asset allocation, the next step is to select the investment strategies. Our investment philosophy document describes how those investment management decisions are made, the processes, and the people behind the scenes. Your investment team will manage the risk and return, periodically rebalance these investments, and keep your money invested in alignment with your goals and values.
How We Build Your Portfolio
We are now ready to build a diversified, high-conviction portfolio based on your individual goals and needs. To do this, we use the latest in academic investment research and the work of two research teams, Litman/Gregory and Athena Invest.