Our approach to asset allocation is the product of rigorous training and extensive experience.
Over 30 years of experience across the rigors of multiple equity market, fixed income and interest rate cycles. The proven acumen exemplified by the CFP® and CPA credentials. Together, these give Scottsdale Wealth Planning a unique perspective and unsurpassed capability among Arizona investment firms to navigate you towards your most important life goals and objectives.
The hallmarks of our approach towards asset allocation within your financial plan include:
REAL DIVERSIFICATION. NOT JUST APPEARANCE DIVERSIFICATION.
Having a large number of holdings does not itself result in lower portfolio risk. What matters is how the risk (and return) characteristics of the holdings respond to market movements and to each other. The less correlation, or common movement, among portfolio holdings and with the market, the lower the risk of the portfolio will be.
A “VALUE” APPROACH TO ASSET ALLOCATION
We seek out holdings in asset classes which themselves we consider cheap, and utilize instruments that give our portfolios the broadest, most diversified exposure to those assets classes.
A BROADER VIEW OF THE OPPORTUNITY SET
This value approach extends to a broader spectrum of asset classes such as convertible securities, high yield bonds, asset backed sectors, and real assets such as real estate investment trusts (REITs), and commodities. These are asset classes with attractive income returns that typically have lower correlation to the general equity and fixed income markets. The inclusion of these asset classes to traditional equity/fixed income “balanced” portfolios can actually enhance returns while reducing overall portfolio risk.
“ACTIVE” MANAGERS WHEN IT COMES TO ASSET ALLOCATION
We are not only constantly evaluating the investment landscape to identify those asset classes that are cheap, but also regularly scan our client portfolios to identify those holdings we believe to be expensive, with reduced return prospects and heightened correlation with market movements. By implementing a policy of consistently pruning portfolios of overpriced holdings and replacing with newly unearthed value holdings, we keep our clients portfolios, and ultimately their financial plans, in the best position to produce the attractive, risk adjusted returns that will achieve client goals.
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