Asset Allocation Design

The specific types of investments that are populating your portfolios are extremely important. The need to understand the way the investments react to certain economic data, federal monetary policy, inflation, etc. should be taken into consideration.  Your risk profile will play a significant role in dictating which individual investments would be paired with your accounts.  

For a conservative investor, as an example, you would not consider emerging markets exposure due to many risks associated with this type of investment whether it’s a mutual fund, individual stock, ETF or even bonds. While these markets may have opportunities that appear more prosperous than others, currency differences, political strife, along with other factors could expose the conservative investor to unsubstantiated risk.   

In order to further explore the concept of asset allocation, we determine the correlation between the holdings in our clients’ portfolios. The relationship between the investments is important.  You may have exposure to the same sort of risks even though you have invested in two different asset classes. We have software programs that assist in sorting out correlation along with the specific percentages that would be most appropriate for your accounts.

Disclaimer: No strategy, including asset allocation, assures success or protects against loss. Stock investing involves risk including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

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200 Hansen Road, Suite 1
Charlottesville, VA 22911

434.971.5917

434.381.4368

info@yourlegacyfoundation.com

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