Asset Allocation

A sset allocation is a tool designed to maximize the return on your portfolio while minimizing the risk. It involves structuring a diversified portfolio from three asset classes - stocks, bonds and cash - based on your income and growth needs and your risk tolerance.

Strategic Asset Allocation

A balanced portfolio with fixed percentages for each asset category (stock, bonds, cash) is selected based on the investor's growth and income needs and risk tolerance. Since each category will grow at different rates over time, the portfolio percentages will change from initial allocation. The portfolio is then rebalanced to bring the asset holdings back in line with the original fixed percentages. The same allocation is maintained over time despite changing economic and market conditions.

Tactical Asset Allocation

A balanced portfolio based on the investor's growth and income needs and risk tolerance. Under tactical asset allocation, the percentages for each asset category (stocks, bonds, cash) are altered over time based on the changing economic and market conditions.