Investment Strategies

I believe in the general merits of an asset allocation approach to investing – create a well-diversified portfolio, diversified not only across risk classes but asset classes, and rebalance periodically to maintain the risk exposure appropriate to the client.

However, in an investment world where investment classes don’t “behave normally,” I believe it’s appropriate to fine-tune this general model to take advantage of opportunities in specific asset classes while minimizing exposure to asset classes that show potentially high risks.

One way to do that is through the "core and satellite" approach – allocate a portion of the portfolio (the core) to the general asset allocation model for diversification and overall risk management, and add "satellite" investments in target sectors, alternatives, or asset classes where there may be potential for greater growth.

Some clients have preferred asset classes and investment strategies – for example, a strong international focus, investing in alternatives like precious metals, or a commitment to socially responsible investing. I help them refine their strategy and offer specific guidance and options to meet their investment objectives.

Yield is important, but yield is a relative concept. One major loss can erase years of gains. I don’t believe in “chasing yield,” but rather in building strategic, durable, yet supple portfolios that are optimized for gain, hedge appropriately for risks, and can adapt to changing environments.

Risk management is typically thought of as an exercise in diversification along various risk classes. I agree. But I also believe that taxes – and the uncertainty surrounding future tax rates – represent another specific area of risk. I therefore also consider diversification of the tax treatments of investments, to give you the option of withdrawal strategies that can accommodate unknown future tax liabilities.

Neither Woodbury Financial Services, Inc., nor its registered representatives or employees provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.