One of the biggest determinants of whether or not you will reach your financial goals is your asset allocation. Selecting the correct mix of assets (stocks and bonds) that has the highest probability of meeting your financial goals, while maintaining an appropriate level of risk, is a complicated task. Asset Allocation accounts for 91.5% of the variation in returns over time. That is why selecting the correct Plus+Portfolio to fit your needs as an investor, is such a critical component in our investment management process.
‘Asset allocation decisions explain the majority of a portfolio’s performance.’
What is Asset Allocation?
Asset allocation is a strategy of dividing your total investment portfolio among various asset classes: such as stocks, bonds and money market securities. Basically, asset allocation is an organized and highly effective way to diversify your portfolio and maximize your returns. At Guardian Plus we employ a strategy of Tactical Asset Allocation, which is an active portfolio management strategy that rebalances the percentage of assets held in various categories in order to take advantage of market changes within different sectors.
Maximizing Return While Minimizing Risk
The main goal of allocating assets among various asset classes is to maximize returns for your chosen level of risk or stated another way, to minimize risk given a certain expected level of return. Your Plus+Portfolio will directly reflect your individual appetite for risk, in order to maximize returns and minimize risk in accordance with you investment needs.
Learn more about Understanding Risk & Reward >
Maintaining Your Portfolio
Now you have selected the Plus+Portfolio that fits your needs, so what is next? We understand the importance of conducting periodic portfolio reviews, since the value of the various assets within your portfolio will change, affecting the weighting of each asset class. For example, if you start with a moderately conservative portfolio, the value of the equity portion may increase significantly during the year, making your portfolio more like that of an investor practicing a more aggresive portfolio strategy, which is higher risk!
The bottom line is that we constantly monitor your portfolio to continually ensure your asset allocation is in-line with your Plus+Portfolio strategy and your individual appetite for risk, and often rebalancing your assets is necessary. Rebalancing is a process of buying and selling portions of your portfolio in order to alter the weight of each asset class in reaction to market changes.
Learn more about Portfolio Rebalancing >
Asset allocation is a fundamental investing principle, because it helps investors maximize profits while minimizing risk. At Guardian Plus it is our top priority to work with you to identify which Plus+Portfolio or asset allocation mix best fits your needs. With Guardian Plus adjusting your asset allocation due to market situations and rebalancing, you have the highest probability of reaching your long-term investment goals.
Guardian Plus Inc. is a registered investment adviser in the State of Washington. The adviser may not transact business in states where it is not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.