Managed Accounts | Investment Management in Ormond Beach, Palm Coast & Lake Mary
Managed Accounts
Asset Allocation and Modern Portfolio Theory are the ideologies we use as the cornerstone for our managed accounts.
Asset Allocation is the process of selecting a mix of asset classes and the efficient allocation of capital to those assets by matching rates of return to a specified and quantifiable tolerance for risk. We have developed six portfolio strategies that are used as Asset Allocation guidelines in designing a client's portfolio. Each model consists of "target" asset allocations in up to nine different asset classes, as well as being diversified into at least twelve different sectors of the market in order to minimize sector and industry risk. By spreading money among a variety of investments, as opposed to investing in just one, a more prudent approach to asset management is created.
Modern Portfolio Theory is the analysis of a portfolio of stocks as opposed to selecting stocks based on their unique investment opportunity. The objectives of Modern Portfolio Theory are to determine a client's preferred level of risk and then construct a portfolio that maximizes their expected return for such risk.
Investment Strategies
The Conservative Strategy (lowest risk) seeks to preserve a portfolio's value by investing primarily in lower risk securities such as fixed income, money market, and mutual funds whose goal it is to minimize negative returns. To diversify and add uncorrelated assets to the portfolio, a small allocation to equities is also included.
The Income Strategy (low risk) seeks to minimize short-term portfolio fluctuations while providing stable current income. This is accomplished by investing primarily in higher quality fixed income securities, money market funds, and mutual funds whose investment objective it is to minimize negative returns. To diversify and add uncorrelated assets to the portfolio, equities are also included.
The Balanced Income Strategy (mid-low risk) seeks both capital appreciation and current income, but places a greater emphasis on income. It invests in a combination of money market funds, fixed income securities and equities.
The Balanced Growth Strategy (mid risk) seeks both capital appreciation and current income, but places a greater emphasis on portfolio growth. It invests in a combination of money market, fixed income securities, and equities. Its Asset Allocation targets a slightly greater percentage of assets in equities than fixed income.
The Growth Strategy (high risk) primary goal is capital appreciation. Generation of income from the portfolio will be a secondary concern. The portfolio Asset Allocation consists of cash, a diversified equity allocation, and fixed income exposure in an attempt to temper volatility.
The Aggressive Growth Strategy (highest risk) seeks to achieve maximum return by investing a very small percentage of assets in cash with the remaining portion invested in a diverse array of equities. It focuses on aggressive growth, small companies and international investments including emerging markets. It's designed to maximize long-term returns rather than minimizing short-term losses. Occasionally, fixed income securities are considered for a portion of this strategy.
The Tactical Growth Strategy seeks to take advantage of market cycles and economic conditions by hedging, shorting, overweighting or underweighting asset classes that may add return or reduce loss based on the economic environment. The portfolio asset allocation uses a mix of equities, fixed income, commodities and cash. A portion of the portfolio is used for individual stocks and various ETF strategies. It is designed to maximize long-term returns while minimizing short-term loss. Since the tactical growth strategy is a mix between tactical allocation and active security selection, the investors’ risk tolerance would be considered aggressive with a long-term time horizon.
