Asset Allocation
Asset allocation is the strategy an investor uses to distribute his or her investments among various classes of investment vehicles. (e.g., stocks and bonds).
Effectively handling the twin challenges of building and managing a portfolio capable of improving investment returns while minimizing exposure to market risk is one reason why Multop Financial was named “One of the Top 10 Most Dependable Wealth Managers of the West” See Awards
Our solution to these challenges is a mixed asset allocation model offering:
- Diversification
- Potential to generate “alpha” (increased value)
- A high degree of flexibility
- Reduction of market risk
In lieu of stock, bonds, mutual funds, and ETFs being at the core of your portfolio, we use non-market alternative and absolute return products in order to generate more consistent positive returns. We have learned several lessons from this bifurcation. As much as traditional assets can be valuable in a portfolio, alternative investments can be useful in increasing the return and lowering volatility in a diversified portfolio. It further improves diversification as well as the efficient use of risk. It’s our belief a better use of an investor’s risk budget is to invest in assets with lower correlations that still meet return objective.
Investors have shown an increasing interest in this alternative strategy for these reasons:
- Strong performance and low correlation with traditional assets
- Potential to generate diversified forms of alpha and potentially create positive returns irrespective of market conditions
- Provides a high degree of flexibility because investment strategies are not bound to traditional benchmarks
- Low volatility
- Dedicated risk management systems and monitoring processes to ensure risk is controlled
- Effectiveness is linked to the managers ability to constantly add value across a range of market conditions
By modifying the traditional approach, this wealth building model is based on the notion that these mixed non-market alternative offer an opportunity to obtain asset-based alpha with low correlation to traditional asset classes, while limiting market risk.
