Asset Allocation Strategy


Asset Class Growth

Objective:

To provide a customized, long-term investment strategy that is appropriate for each client’s level of risk tolerance and investment goals.

Asset allocation is the process of combining asset classes such as domestic stocks, international, stocks, bonds, real estate, commodities and cash in order to meet investment goals. The Shaker Asset Allocation Strategy is designed to provide our clients with a long-term and low maintenance solution to investing.

We conduct a qualitative and quantitative review of client’s overall investment goals and tolerance for risk. Once we understand our client’s goals and risk concerns we use low-cost investment vehicles, including exchange traded funds, to build our client’s portfolios.

Studies have shown that individual investors are very bad at timing the market. They sell when they should buy, and buy when they should sell. Shaker utilizes a two-portfolio approach to investment planning to avoid this common pitfall: one portfolio for long-term investing and one portfolio for short-term investing. Investing with a “two-portfolio” approach provides a solution for enduring short term market fluctuations and helps investors avoid selling at the wrong time. The long-term portfolio is created with long-term investment goals in mind. These goals have a time horizon of 3 years or more and include saving for retirement, long-term care, legacy planning, and college savings for young children. The long-term portfolio is allocated to asset classes that are more volatile but have the potential for higher returns. Some examples are domestic equities, international equities, real estate, commodities, corporate bonds, and long-term government bonds. The short-term portfolio is created for investment goals with a time horizon of less than 3 years in mind. Some examples of these goals are a “rainy day fund”, a down payment for a soon-to-be-purchased house, and college savings for a college bound teenager to name a few. The allocation for the short-term portfolio is in asset classes that are typically less volatile and have a lower potential return.

Consistent and tactical rebalancing keeps the portfolios allocated to the specifications agreed upon with the client.

The Shaker asset allocation strategy provides a well thought out investment plan for our clients. The use of exchange traded funds and other pooled investment vehicles provides a cost efficient approach.

Portfolio Manager: Edward P. Hemmelgarn

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Disclaimer: Information above is obtained from various sources. We do not guarantee its accuracy. Small Cap returns are calculated using the Russell 2000 Index. US Large Cap returns are calculated using the S&P 500 Index. Developed Ex-US returns are calculated using MSCI EAFE Index. Emerging Markets returns are calculated using the MSCI Emerging Markets Index. Gold returns are calculated using historic daily spot exchange rates. Short-term US Treasury returns are calculated using Bloomberg Barclays U.S. treasury: 1-3 Total Return Index. Past performance is not indicative of future returns.