Asset Allocation

Wealth management and all investments involve an element of risk. Risk comes in many varieties, market risk, interest risk, inflation risk, liquidity and tax risk. Asset allocation spreads risk throughout a mix of asset classes, easing some risk associated with each class. Which classes are selected varies, based on the investors’ financial profile, investment preferences, and tolerance for risk. An asset allocation strategy will be more stable and less susceptible to adverse movements in any one asset class.

An individual asset allocation strategy will mitigate certain risks attached to one asset class through diversification and balance.

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Time Diversification

Time Diversification

“Asset diversification has long been heralded as the safe way to invest. That’s why you buy index funds. What if this isn’t the only way to diversify? Lifecycle Investing develops a strategy to better spread risk over your working lifetime—that is, diversifying over time. Time diversification makes it possible to earn the same return with a lower risk or a higher return for the same risk.

Our video interview below provides an overview of Lifecycle Investing. (You’ll find additional videos here.) You can find out more about the book, read an excerpt, and explore our data to see the results for yourself. ”

– Directly Quoted from Lifecyleinvesting.net

Individual Strategy

Wealth management is personal to each investor. An individual’s desired goals, priorities, investment preferences and tolerance for risk will determine which strategy should be taken. There is no perfect mix of assets, each investor has different priorities, based on their portfolio. An investment strategy is built with careful consideration of the key elements of their financial profile:


Investment Objectives:

What it is the investor hopes to achieve using his investment dollars – improve current lifestyle; achieve capital growth; fund a specific goal, such as a college education

Risk Tolerance:

This reflects the investor’s comfort level with market fluctuations that can result in losses.  Inflation risk and interest risk need to be considered as well.

Investment Preferences:

An investor may prefer one asset class over another based on a certain bias or interest towards the characteristics of that class.

Time Horizon:

The length of time an investor is willing to commit to achieving his objectives.


Investing in a mix of asset classes will have varying tax consequences.
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