Capital Investment Services
Capital Investment Services

Asset Allocation

Understanding Your True Asset Mix

Over the past 20 years, asset allocation has increasingly become the foundation of individual as well as institutional investment portfolios. Asset allocation entails exchanging the potential to reap a higher return – and the risk of taking an equally dramatic loss – for the likelihood of generating a more consistent, positive return over the long term.

The general idea is that instead of devoting the bulk of your assets to a particular sector or even one specific investment, you choose different types of investments. Underlying this decision is the assumption that each asset class will react somewhat differently to a given event.

Basic Asset Classes
Depending on your appetite for risk, the economic environment, your specific investment objectives and other factors, your portfolio might include some or all of the following:

  • Cash and cash alternatives
  • U.S. equities
  • Non-U.S. equities
  • Fixed income
  • Real estate
  • Alternative investments

Diving Deeper
While the overall concept of asset allocation is fairly straightforward, determining precisely how your assets are allocated is typically more complicated. That’s because most portfolios include some sort of packaged investment products that are themselves divided among asset categories.

We can help you understand your portfolio’s true allocation by examining all your assets and the vehicles in which they are held. Combining that knowledge with an understanding of your investment objectives and risk tolerance, we can then make recommendations to help ensure your portfolio stays in line with your investing goals.

Diversification and strategic asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.