Investment Philosophy

STRATEGIC ASSET ALLOCATION As advisers, one of the most important considerations we make for our clients is what assets we invest their money in. Depending on their financial goals, strategic asset allocation attempts to build a corresponding mix of assets that produces the most appropriate level of risk and reward, and expected return. While many adviser firms include Strategic Asset Allocation as part of their investment process, there can be great disparity in both the importance placed on it and the sophistication of the chosen allocation process. Asset allocation is the practice of diversifying assets between different asset classes and is recognised as a very important part of the process of building a portfolio. In fact, a number of studies have found that the decision as to how to divide up a portfolio into several classes is more important than the process of choosing the actual stocks, bonds, and funds that are owned. The model portfolio theory (MPT), a mathematical quantification of the benefits of diversification, states that by combining different types of assets the collective investment will have a lower level of risk and reward (defined as variance in investment return) than if the money was held in a single investment. INDEPENDENT FINANCIAL ADVISERS