Asset Allocation - The Foundation

Simply put, asset allocation is how you divide your cash, bond, and stock assets.  By placing more money in stocks, for example, you increase your portfolio's return potential, but also raise its risk profile.  Just as a gardener allocates her plantings according to soil conditions, weather, and sun exposure, we make portfolio recommendations according to your risk tolerances and capacities, your time horizon for investing, your specific goals, and your tax and liquidity concerns. 

Asset Diversification

Once there is agreement about the asset allocation plan, we help you select the underlying securities to fill in those allocations.  Typically, we will recommend very low-cost mutual funds and/or exchange-traded funds that are linked to a major index (like the S&P 500, for example) or passively managed and are provided by generally reliable and shareholder-friendly institutions (such as Vanguard, Schwab, I-Shares, Fidelity, et.al.).  We also will review where assets should be located (i.e., what should go in your established 401(k) or IRA, and what should be in taxable accounts?).  At all times, we are concerned with limiting costs of investment, minimizing taxes, increasing income production without materially increasing risk, and linking growth and/or income assets to your future goals as befits the overall allocation strategy.

Future Monitoring and Rebalancing

Once your portfolio is designed and implemented, we can help you monitor its performance in the future.  Occasionally, as stock and bond markets rise or fall, there will be a need to sell assets that have increased in value and buy assets that have fallen in value.  This tactic keeps your broad asset allocation strategy in balance, and it also has the virtue of selling high and buying low (rather than the other way around, which is much less profitable!). 

​We also can help you understand market conditions (such as deflation, currency strength, interest rate changes, et.al.) and navigate the emotional pitfalls that come with stock and bond market volatility. 

​We only help with this work on an as-needed or as-requested basis, based on time utilized, so if you don't need or want assistance after the initial portfolio design is implemented, you aren't charged for it (but you do take on the monitoring and re-balancing responsibilities on your own).