Investment Management Process

Our goal is to provide consistently solid performance over time, but with special emphasis on minimizing losses in poor market environments.  Each portfolio consists of carefully selected funds that are combined in an effort to achieve the objectives of that portfolio.  Portfolio management proceeds in four steps:
1. First we establish a long-term asset allocation mix that we call the Target Long-Term Allocation.  Imagine a pie chart where each slice of the pie represents an asset class.
2. Periodically we adjust the Target Long-Term Allocation based on our changing expectations about the future risk and return characteristics of various asset classes.  The result is what we call our Target Current Allocation¹.
3. We have developed and continue to maintain an “approved list” of mutual funds that we believe can consistently add value to our investment portfolios over time.
4. Finally, we test thousands of combinations of funds from our approved list to find the combination we believe is most likely to perform better than the Target Current Allocation.  Note that the specific funds selected in this way can change over time. 

About Asset Classes

The adjustments for each portfolio strategy discussed in step 2 are typically made within acceptable limits that we have established for five groups of asset classes².  For example, our US Equity group (i.e., US stocks) might be limited to between 20% and 50% of a portfolio.






US Equity Int’l Equity Fixed Income Alternatives Real Assets
US Large Int’l Large US Bonds Abs Return REITs
US Small Int’l Small LT Govt Bonds Managed Futures Commodities
  Emerg Mkts High-Yield Bonds   TIPs
    Int’l Bonds    
    Floating Rate    
    Cash Equivalents    
¹Asset classes may be added or subtracted from the Target Long-Term Allocation in forming the Target Current Allocation.
²Not all asset classes are used in the construction of all portfolio strategies.