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Asset Allocation
The Importance Of Asset Mix
At Frontwater Capital, we seek to maximize the total return of a balanced portfolio, putting emphasis on the asset mix and how asset classes perform against each other. For most investors, implementing a prudent asset allocation strategy and investing over time are a more likely means of investment success.
How does asset allocation work?
How a portfolio manager or financial advisor divides funds into different asset classes is the process of asset allocation. A broad asset class such as bonds can be divided into smaller asset classes such as Treasury bonds, corporate bonds and high yield bonds. Likewise, equities can be divided into various industrial sectors including consumer products, industrials, financials, technology, etc.
How are weights assigned to asset classes?
The weightings of each asset class depend on the individual's risk profile and time horizon as well as the financial advisor's economic outlook. As asset classes begin to change in value with fluctuations in the market, the portfolio weightings of the various asset classes will also change. This requires a rebalancing back to our strategic asset mix.
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Financial Planning
The investment environment is ever changing and doing a financial plan is an important first step. Everyone wants to know the same things when it comes to financial and tax planning for retirement:
Tax Planning
To meet the investment challenges associated with a volatile global economy requires a robust portfolio optimization and asset allocation model. We help take these complex concepts and make them accessible to individual investors while factoring taxable and tax deferred investments into the mix.
Retirement Planning
The majority of retirees today aren't just living longer — they're also living younger. Still vital and energetic once they hit 65, retirees can now expect to live another 20 to 30 years. While these extra years offer much to be desired, they also present financial risk — the risk that you could outlive your savings. In fact, concerns about having enough money in retirement are common among 40 to 55 year olds.
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