There is no ‘Holy Grail’ of investing. Success comes from consistently following a strategy that matches your individual needs for growth and income, while balancing your tolerance for risk. Hamilton-Bates Investment Portfolios employ one of two general methodologies; Strategic Asset Allocation or Tactical Asset Allocation, each with its own set of characteristics and appropriate depending upon an investors objectives and risk profile.

Strategic Allocation
The Strategic Asset Allocation Program employs the Modern Portfolio Theory of asset allocation and diversification, put forward by investment allocation pioneers Sharpe and Markowitz. The Strategic Allocation Portfolios employ a diversified approach to investing, holding a mix of stocks, bonds and cash equivalents, optimized based on their historical relationships. Strategic Allocation minimizes trading and keeps client portfolios fully invested. These portfolios are closely monitored, and rebalanced quarterly in order to ensure an optimum balance of assets and fund continuity.

Modern Portfolio Theory is based on asset diversification. It is designed for investors who desire a strategy that remains fully invested with measurable asset diversification. The theory is based on the concept that a portfolio can be optimally invested by utilizing a variety of asset classes. This is accomplished by analyzing historical relationships between asset classes. If two asset classes historically move together in price, they are said to have positive correlation. If two asset classes tend to move in opposite directions, they are said to have negative correlation. By combining asset classes that have low or negative correlation, a more efficient portfolio is created than a portfolio consisting of just a single asset class, most commonly stocks. Modern Portfolio Theory endeavors to generate the maximum possible expected return for a given level of acceptable risk.

All major asset classes are analyzed in the Strategic Asset Allocation Program and divided into specific categories. These asset classes differ in their expected returns and levels of risk. In this way, by combining assets that complement each other, some assets will increase in value even as others fall, therefore, mitigating portfolio losses and volatility. The result can be a portfolio that has a low level of risk relative to its expected return.

The Strategic Asset Allocation Strategy employs a risk reduction strategy through investment diversification.  There are three portfolio options in the Strategic Allocation Strategy, based on investment objective and risk tolerance. Typical asset class breakdowns are shown. Investment positions can and will vary based on economic conditions.

Asset Class Ranges and guideline weightings (The Stocks category includes international as well as domestic equities, while Bonds includes cash equivalents).
 

                   
Strategy Summary
The Strategic Allocation Program identifies asset classes to specific benchmarks to provide diversification and reduce overlap. Using these benchmarks the varying asset classes are analyzed and the portfolios are created. The available mutual fund universe undergoes an investment style analysis to insure that it reflects the appropriate benchmark. Once the mutual funds are selected, the optimized portfolio is complete. The portfolios are reviewed, re-optimized and re-balanced on a regular basis. The mutual funds within the portfolios are regularly reviewed to insure investment style consistency and adjustments are made if necessary. In addition to their regular statement they receive directly from the funds, clients receive a Quarterly HBIR Account Statement along with a newsletter detailing the current financial market outlook.

The Strategic Asset Allocation Program is appropriate for virtually all long-term investors. Their diversification makes them well suited to represent the foundation of an investor's holdings.