DECIDING ASSET ALLOCATION

SIMI typically uses a “balanced” approach to portfolio development, meaning that clients own a mix of stocks, bonds, and various “alternative investments” such as Real Estate Investment Trusts (REITs) and commodity-type funds. Our quarterly review of each account’s asset mix may result in changes to the mix depending on quantitative factors such as changing asset class valuations and market volatility, as well as qualitative factors including political risks, global trends, and the client’s investment objectives and risk-taking capability.

DIVERSIFICATION

We stress diversification as a key component of portfolio design. In stock portfolios, investments are typically diversified across major domestic and global economic sectors.  SIMI may augment individual security selection with managed, index or exchange-traded funds. Diversification substantially reduces the likelihood of major portfolio swings beyond the securities markets’ normal fluctuations.