We are careful in setting your long-term investment objectives. Then, we plan 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.