Portfolio Management



Some investors believe it is their advisors’ job to make them wealthy by “beating the market.” They envision their financial advisor pouring over stock reports, economic research and market analysis in an attempt to outsmart everyone else.

The truth is, most experienced financial advisors (including those with superior knowledge, market experience, and analytical ability) are not trying to beat the market. Experienced financial advisors help clients achieve their financial goals by designing and overseeing a disciplined strategy that reflects not only the client’s return needs, but risk tolerance, priorities, and time horizons. Trying to achieve increasingly higher returns by taking on additional risk is rarely in the clients’ best interest. 

Designing and maintaining a customized portfolio to meet a client’s specific goals, risk tolerance and time horizon is an important part of a financial advisor’s job and represents a real and valuable service. This is the science of portfolio management. In the short run, navigating our clients through periods of irrational exuberance or paralyzing fear is another matter. This is the art of portfolio management.

The relative risk of an asset class (e.g. small-company growth stocks, large-company value stocks, municipal bonds, commodities, etc.) changes over different time horizons. As a result, the appropriate asset allocation for a 30-year goal is very different from that of a 5-year goal. In addition, a portfolio built for growth is very different than a portfolio built for generating steady income.

Our approach to investment strategy recognizes that over 90% of a portfolio’s performance is determined by the allocation of assets among broad asset classes, rather than individual security selection or market timing.1 We have designed five, dynamic model portfolios, each with its own asset allocation, associated risk level, and return potential.

After a model portfolio is selected, a management approach will be chosen and appropriate securities will be selected. Our objective is not to scrap your current portfolio, but to work with the assets you currently have, moving incrementally over time toward the model that best suits your needs. We continue to work with you on an ongoing basis to manage your portfolio over time, making adjustments as needed to stay on-track to achieve your goals.

1. Source: Gary P. Brinson, L. Randolph Hood, and Gilbert L. Beebower, Determinants of Portfolio Performance, The Financial Analysts Journal, July/August 1986