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Asset allocation is the process of mixing the investment assets to balance risk and return appropriate to the client’s overall financial position.
We conduct statistical analysis on management styles to balance investment diversification. Every asset category has certain characteristics
of potential losses and gains. Looking at historic returns gives the client a familiar way in which to gauge risk, while looking at actual portfolios allows the client to be comfortable with the selected investment choices.
By showing the client the benchmarks by which we measure the performance of our portfolio managers, the client can see historically what “risk” means as demonstrated by performance. Look carefully at the variation in returns,
or what we view as risk. When the client allocates assets with Trust Navigator, volatility by asset category is an important consideration.
We keep a close eye on Callan's Periodic Tables of Investment Returns, which depicts annual returns for eight different asset classes. It contains an enormous amount of information, but most importantly it shows that diversification is important across investment styles, capitalization, and equity markets.
Callan Chart
Risk Tolerance>>
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