Proof that strategic is not that passive is found in the wide variety of strategic portfolios listed here. Within the passive investing community there is vigorous debate about what assets should be included in a portfolio. For instance, some believe that commodities are an essential part of a diversified portfolio while others point out that commodities provide little in the way of long term real returns and can therefore be ignored. We tend to come down in favor of including them – they do tend to be negatively correlated to stocks, offer some diversification benefits and are a good hedge against a weak dollar – but also acknowledge that the benefits gained are fairly small. Another debate centers around the benefits of including foreign stocks in the portfolio. None other than John Bogle, the founder of Vanguard and the father of the index fund, has said that he would never own anything but US stocks. There are plenty of other very smart people who have the exact opposite opinion.
At Alhambra, we have had these same debates and are no closer to resolving them than anyone else. As with most things in life, there are advantages and disadvantages to including or excluding certain asset classes. We would just point out that there is no way to know the “correct” allocation in advance. For instance, excluding foreign stocks from your portfolio during the period from 2002 to 2007 when the US dollar was falling consistently meant missing out on significant returns for an extended period of time as foreign stocks outperformed the US by a wide margin. The same is true of commodities which performed very well during that period. But taking that 5 year period as evidence that those assets should always be included in one’s portfolio would have seemed a big mistake over the subsequent 5 years. US stocks have outperformed since then and commodities have generally performed poorly.
And so, we have researched the many passive portfolio approaches and listed them here. We have segregated them based on various criteria. Which one should you use? Frankly, we’re not sure it makes a lot of difference. As long as the portfolio has a variety of assets with different return profiles, they all should perform well over the long term (10 years or more). Which one will perform the best over the next five years? Here’s something very few advisors will ever tell you: we don’t know.
So, if you are well informed on the passive debate and you know your risk tolerance, you can choose one of these based on those beliefs. Or if you aren’t and/or you don’t, we’ll assist you in choosing one that conforms to, as best we can determine, your beliefs, preferences and tolerance for risk. Either way, just give us a call (305-233-3772 or 786-249-3773) or use the contact form or email us (firstname.lastname@example.org) to discuss fees, account setup and generally how to get started working with Alhambra. We prefer Fidelity, Schwab or TD Ameritrade as custodians but we can work with whatever broker/custodian you prefer.
Aggressive Growth 10 – An aggressive global allocation with a 10% allocation to bonds.
Aggressive Growth 20 – An aggressive global allocation with a 20% allocation to bonds.
Growth 30 – Globally diversified portfolio of 9 asset classes. 30% bond allocation.
Moderate Growth 40 – Globally diversified portfolio of 10 asset classes. 40% bond allocation.
Stable Return 60 – Globally diversified portfolio of 9 asset classes. 60% bond allocation.
Two Step – The simplest of portfolios consisting of just US stocks and bonds in equal amounts.
Triple Play – US and International stocks + bonds in equal portions.
Global Market Portfolio – Own the entire universe of investments in one portfolio.
Four Square – US and International total stock, US TIPS and Int’l Government bonds.
Five Dimension – Builds on the Four Square by adding REITs to the mix.
Sixth Sense – Global, 6 asset classes. Includes an allocation to a Natural Resource ETF.
Value 7 – Globally diversified, inflation protection, natural resources and bonds in 7 ETFs.
Global Strategic 9 – Globally diversified portfolio of 9 asset classes. Can be adjusted to fit any risk tolerance.
Balanced 50 – Globally diversified portfolio of 9 asset classes. 50% bond allocation makes it a moderately conservative choice.
Capital Preservation 70 – As the name says, this portfolio is about capital preservation. Globally diversified, growth is a secondary consideration.
Capital Preservation 80 – Even more conservative than the 70 version.
The Alhambra Investment Partners website is an impersonal advisory service; therefore, no consideration is made towards your individual financial circumstances. All contents presented within www.alhambrapartners.com (henceforth referred to as “this Website”) is not to be regarded as investment advice. It is for general informational purposes only. Trading securities involves risk, so you must always use your own best judgment when trading securities.
We cannot guarantee profits of any kind, nor can we protect you from losses. You assume the entire cost and risk of any trading you choose to undertake. You are completely responsible for making any investment decisions. The owners of this site are owners of Alhambra Investment Partners. AIP is an investment advisory firm registered with the SEC. In their capacity as investment advisors they will often own the same securities mentioned on this website.
Use of this Web site in no way constitutes a client/advisor relationship, all information we communicate to you either through our Web site or other forms of communications, are purely for informational purposes only. We recommend seeking individual investment advice before making any investment, for you are assuming sole liability for your investments. Alhambra Partners will in no way have discretionary authority over your trading or investment accounts. If you desire a formal investment advisory relationship, please contact Bob Williams @828-230-6690, bob.williams@alhambrapartners.
All information posted is believed to come from reliable sources. Alhambra Partners does not warrant the accuracy, correctness, or completeness of information available on this site and therefore will not be liable for any loss incurred.
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There is no guarantee past performance will be indicative of future results. No assurances can be given that the trades posted by Alhambra Partners will be profitable or will not be subject to losses. Remember, always take the time to do your own research involving your personal investments.
The results listed at this Web site are based on model portfolios. These trades may or may not have been actually executed. Model portfolio performance results have certain inherent limitations.
Unlike an actual performance record, simulated trades do not represent actual trading. Also, since the trades may not have been actually executed, the results may have over or under compensated for the impact, if any, of certain market factors such as lack of liquidity, money flow, etc. Your results may have been better or worse than the results portrayed. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
No independent party has audited the hypothetical model portfolio performance at this Web site, nor has any independent party undertaken to confirm that it adheres to the assumptions or conditions specified hereafter.
While the results presented at this Web site are based on certain assumptions that are believed to reflect actual trading conditions, these assumptions may not include all variables that can affect, or have affected in the past, the execution of trades indicated by Alhambra Partners.
The hypothetical portfolio results on this Web site are based on the following assumptions:
1. The hypothetical portfolio record does not include deductions for brokerage commissions, exchange fees, or slippage.
2. The simulation assumes that prices are not influenced by the trades of Alhambra Partners, its owners, or its representatives, regardless of the size of the positions taken.
3. The simulation assumes purchase and sale prices believed to be attainable. In actual trading, the prices attained may or may not be the same as the assumed order prices.
4. The hypothetical portfolio results do not take into account any tax implications arising from the sale or purchase of securities, which in actual trading do have an impact on gains and losses.
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Alright, enough of the legal mumbo jumbo. The bottom line is this. We are posting this information here in good faith. We aren’t involved in penny stocks or any other stock promotion activities. We aren’t compensated by anyone for the information we post here. If you are following our model portfolios, you are doing so at your own risk. It’s your money and your responsibility.