MR Financial Group

Asset Allocation

Research has shown that the asset allocation decision - how your investments are diversified among multiple asset classes such as stocks, bonds and cash - has by far the most significant impact on overall performance. As illustrated below, over 90% of the variation in returns is due to the asset allocation of investments in a portfolio. Market timing or stock selection, in comparison, makes little difference. This is why determining the right asset allocation policy for you is critical to your investment success.

Depending on how to structure your portfolio, you can either decrease risk while maintaining a given level of return, or increase your potential return while maintaining risk at a given level. To understand this, look at the historical performance of three hypothetical portfolios below – each with very different asset association policies. Portfolio A was structured to reduce risk, as shown in Portfolio B, or structured to enhance return as shown in Portfolio C.

We develop diversified portfolios with risk/return profiles varying from very conservative to very aggressive. Based on your personal investment objectives, time horizon and risk profile, we will design an asset allocation policy that meets your particular needs.

* Diversification does not eliminate the risk of investing; losses are possible in diversified portfolios.

* Past performance is not indicative of future returns” and “This is a hypothetical example used for illustrative purposes only, and does not represent the return of any specific investment. Actual rates of return will vary over time, particularly for long-term investments.