Broker Check

Model Portfolios

One of the approaches we advocate is the use of model portfolios. Our model portfolio is a culmination of our best ideas based upon time-tested investment principles and an understanding of behavioral finance.

A model portfolio has the potential to mitigate some of the psychological tricks the human mind can play on you when it comes to investing. Both the client and the advisor are susceptible to logical fallacies and cognitive biases including:

The strength of a model portfolio is that it may mitigate these and other examples of faulty thinking. A model portfolio doesn't care about you and your feelings. Instead, a model portfolio is attempting to use time-tested investment principles to make allocations most appropriate to everyone invested. This mechanical, logical approach may help save us from ourselves, so to speak.

Our models have certain characteristics. The models are based upon the common tenets of Modern Portfolio Theory. However, we advocate for the use of technical data to help us choose what may be the best allocation. In the short term, we are not concerned with "beating the market". Instead we are concerned with capturing as much of the upside in a bull market, while mitigating downside capture in a bear market

Formulating our diversified, tactical asset allocation model is based on a set of rules informed by technical data like:

We use these rules to pick the best Exchange-Traded Funds (ETF) for our model portfolio. We use ETFs for several reasons. First, due to their ability to be traded intraday. Second, they tend to have lower internal expenses compared to active mutual funds. Finally, they make tax-loss harvesting easier while staying invested. 

Would you like to implement your portfolio now?  click here

Have questions? click here