Strategic Models

Overview

Our strategic portfolios are designed to give clients access to an efficient portfolio solution in order to meet long-term investment goals. We consult with each client and adjust the allocation to a variance reducing mix of assets, producing a portfolio catered to his/her individual investment goals and risk profile. We generally increase the percentage of short-term bonds to reduce risk and volatility. For example, our most aggressive strategic portfolios allocate 90% to an efficient mix of stocks, real estate and hard assets, while investing 10% into bonds (Our 90/10 Aggressive Portfolios). Our most conservative strategic portfolio allocates 30% to the mix of stocks, real estate and hard assets while allocating 70% to short-term government and investment grade bonds (our 30/70 Conservative Fundamental Portfolio).  Aware that correlations between asset classes display short term variation and cognizant of the ever-changing, dynamic global economy, we periodically review the allocations to ensure the most efficient portfolio for the long term.

What follows is a description of our moderately aggressive portfolios, annually rebalanced, and their performance versus the S&P 500 for the time period from 5/31/1998 to 1/31/2012. This time period includes two major bear markets, the technology bubble of the early 2000s, and the housing bubble of the late 2000s. This time period was chosen to reflect the longest  history using the actual ETF’s and funds selected for inclusion in these portfolios. For allocations to international bonds, international real estate, and commodities, we have selected newer funds. For those assets, we have applied the appropriate annual fee to the underlying indices. The resulting portfolio has a correlation of .999 when the actual proxies for these exposures are analyzed over a shorter time period.

In conclusion, over the given time period, both of these portfolios have outperformed the S&P 500, but with a lower risk profile. Of course no one can predict the future and as always past performance is no guarantee of future performance.

Click on the links below to view a description and performance of our 60/40 moderately conservative strategic portfolios:

Global Advanced

This portfolio has 11 asset classes that is diversified globally across stocks, real estate, commodities, and bonds. It is designed to maximize the impact that historical academic research on asset allocation and Modern Portfolio Theory has demonstrated.

Global Strategic

This portfolio has 9 asset classes that is diversified globally across stocks, real estate, commodities, and bonds. Its broad diversification is designed to generate similar results. It may be more appropriate for those investors desiring less complexity and/or more tax efficiency.

Global Fundamental

This portfolio has 7 asset classes that is also diversified across US and international stocks, US real estate, commodities, and US bonds. Its broad diversification is designed to generate similar results while investing in minimal positions. It may be more appropriate for those investors desiring less complexity, more tax efficiency, and / or with limited investable assets.

US Fundamental (Alhambra 5)

This portfolio has 5 asset classes that is diversified across US stocks, real estate, commodities, and bonds. Its broad diversification is designed to generate similar results while investing in minimal positions. It may be more appropriate for those investors desiring less complexity, more tax efficiency, and / or with limited investable assets.

International Fundamental

This portfolio has 5 asset classes that is diversified across international stocks, real estate, commodities, and bonds. Its broad diversification is designed to generate similar results while investing in minimal positions. It may be more appropriate for those investors desiring less complexity, more tax efficiency, and / or with limited investable assets.