Now that we are into the second half of 2013, our investment managers are making some tactical changes to our clients’ portfolios to better align them with market conditions. In this case, we’re talking about our semi-passive portfolio model. This year while U.S. stocks have been up, many other asset classes have been down, and such fluctuations can be hard to predict. In addition, the Federal Reserve has purchased $85 billion in fixed income securities each month, keeping fixed income yields low and pushing investors into riskier asset classes like stocks.
To keep our clients’ portfolios stable, we are shifting some of their investments and diversifying their portfolios into multiple asset classes. This helps us minimize the impact of significant fluctuations in the market place. Look at these graphs to get a better idea of what we mean. In the chart on the left, which represents a traditional portfolio, we’re only investing in three asset classes, producing a return of 7.43% over time. In the chart on the right, we’ve diversified into eight asset classes, producing a return of 7.72%. In addition to increasing our yield, we’ve also reduced the volatility of our clients’ portfolios.
Are you getting this type of service and result from your investment firm? If not, or if you want more information on our investment philosophies, give us a call at 206-386-5455 or email us today.
To your wealth,
Joe Maas, CFA, AVA, CFP®, ChFC, CLU®, MSFS, CCIM
President of Synergetic Finance