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What is Wealth Coaching?
How much are your investments
costing you?
Are
you truly diversified?
Modern Portfolio Theory Quiz
Who are you, really?
Prudent Retirement Plan
Wealth Advisors Group
The Stewardship Alliance
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True Diversification: To be truly diversified,
your Modern Portfolio Theory (MPT) portfolio needs to have investments in each of the 12 levels
of risk; therefore only one money manager purchases each level of
risk. (US Large Growth, US Large Value, International Large Growth,
International Large Value, International Small Value, US Micro Cap,
US Small Value, Emerging Market, Global Bond, One Year Government
Bond, and Five Year Government Bond.) Most important: the various
levels of risk must be correlated according to your Investment Philosophy
and quarterly rebalanced to keep the MPT risk allocations true to
your Investment Philosophy.
Typical Asset Allocation
The typical client’s Asset Allocation
Analysis shows that most clients only have 3 levels of risk in their
portfolios (US Large Growth, International Large Growth, and One
Year Government Bonds) with multiple money managers consistently
purchasing the same stocks and bonds. Clients may have many mutual
funds and annuities, but are typically poorly diversified and not
investing according to their risk tolerance.
Consider these Questions…
1. Have you ever done an Asset Allocation
Analysis on your current portfolio?
2. How many money managers are buying the S&P 500 for you?
3. How many managers do you want to pay to buy the same stocks?
4. How do you measure your portfolio risk?
5. How do you control your risk?
6. Does your portfolio stay true to your Investment Policy?
7. Do you have an Investment Policy?
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