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Asset Allocation

We believe in modern portfolio theory and work with our clients to pursue appropriate asset allocation for their portfolios.

A ten-year study of 82 large pension plans estimated that 91.5% of the returns for the employees were a result of Asset Allocation decisions. Only 4.6% were due to security selection, 2.1% were attributed to other factors, and only 1.8% resulted from market timing. Clearly, asset allocation will be an important factor in your portfolio's performance.

It has been said that to get more return you must take more risk. This statement assumes that you have found the “efficient frontier”. The “efficient frontier” is not a risk free portfolio, but rather it is all the portfolios in which all the risk that can be removed through diversification has been removed. Until you find the “efficient frontier” there is asset allocation available that can produce more return without more risk, or produce the same return with less risk.

 All investing involves risk. Asset allocation does not ensure a profit or protect against a loss

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