Asset Allocation and Diversification

We are committed to asset allocation and diversification, both among and within asset classes. What differentiates us from most of our competitors, when executing our multi-asset class approach, is that we are not compelled to always be fully invested, nor do we use static pie charts or rely on quarterly rebalancing to realign investment weightings. When valuations are not compelling and trends are pointing in the wrong direction for capital appreciation, we move to a defensive posture by hedging our exposure or simply holding larger percentages of cash and cash-equivalents in a portfolio until we find opportunity.

This runs contrary to what has become standard operating procedure for the financial planning community whose approach assumes markets are efficient.These adherents to Modern Portfolio Theory believe that remaining fully invested in different asset classes (stocks, bonds, commodities) that have little correlation with one another reduces risk and improves returns. The reality is that markets are inefficient, meaning that they can deviate from historical rates of return for long periods of time that extend beyond an investor’s time horizon. Consider the fact that a passive investment in the S&P 500 index has yielded a zero return for more than a decade. There are also periods of crisis when asset classes become highly correlated, all declining in value at the same time (2008-2009), and diversification provides no defense. This is why we embrace a more tactical approach.

Research & Analysis

The breadth of resources at our disposal from a research standpoint is unmatched for a boutique asset management firm like ours. This comes from the relationships our CIO has built on Wall Street over a career spanning 45 years. We leverage these resources to navigate the global financial markets in pursuit of strategic investments in stocks, bonds, commodities and currencies. Investment decisions are based on the fundamental analysis of valuations and macroeconomic trends, as well as the technical analysis of supply and demand for each asset class and the securities within it. Our goal is to identify leadership across the major asset classes and within each asset class at reasonable valuations in order to build diversified portfolios that achieve our targeted rate of return with the least amount of risk for our clients.

Risk Management

When customizing a portfolio for a client, we establish tactical ranges of minimum and maximum exposure allowable for each asset class. These exposure levels determine the amount of risk, or volatility, we are willing to accept to achieve a targeted rate of return. The collective minimums are our core exposure. The remaining percentage to be invested is our tactical exposure, invested to capitalize on current trends and new opportunities, but also serving as cash reserves when we are defensively positioned. Both core and tactical exposures are actively managed.


We have no interest in “beating the market” in any particular year. Our goal is to achieve, at a minimum, the targeted rate of return established to meet the client’s objectives on a consistent basis. We may sacrifice some of the upside in a bull market, but we think we will more than compensate for that missed opportunity by avoiding substantial losses in bear markets.

Costs & Liquidity

Minimizing costs and taxes can have a significant impact on returns over time. We strive to reduce the cost of investing by purchasing individual stocks and bonds or passively managed exchange-traded funds (ETFs) with very low internal fees. We work to minimize taxes by balancing gains and losses at year-end, and placing securities that are tax-inefficient in retirement accounts. We only purchase securities that are highly liquid, and that can be converted to cash without delay.