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Asset Allocation Strategies

September 10, 2014

Hi and welcome back to the Goldstone Financial Groups Blog page.

Everyday when we meet with clients, one of the major items we discuss is having the correct asset allocation strategy. At the Goldstone Financial Group we feel that diversification is the key to securing your financial future. Think about it…if you place all your money in one spot you are at risk of a catastrophic situation. Diversification is the way to invest for the future…spreading out your money and minimizing your chances for loss in the future. Where we have the challenge with this is that in 1954 there was the development of what was called THE MODERN PORTFOLIO THEORY and yes it was very modern back then. Now lets fast forward 60 years to 2014. Are our economies the same..are our lives the same…are our technologies the same? of course not, things are vastly different. Then how could we expect a theory developed 60 years ago to be relevant today? Back in 1954 you might have US stocks and you might also have European stocks and be perfectly safe because there was a very low correlation between the two. Now, today…if someone sneezes in Germany it affects our markets..if someone stubs their toe in Japan it affects our markets, figuratively speaking of course. Today we have a global economy and we are all affected by each other. So with that in mind the Goldstone Financial Group has developed something very special for our clients. We call it TRUE…true diversification and this is how it works. We look at a clients situation, their goals, their hopes and dreams and then we will design a diversified portfolio for them but with a different twist. We will make sure that each of our recommendations has a very low correlation or no correlation to one another. The way we accomplish this is by using what we call the Core Satellite Approach. The core is a foundational piece. We not only want it to generate returns for the client but we also want it to act as a foundation or defense mechanism for the portfolio so that it’s not only making money in a rising market but also in a correcting period.. Then we build smaller investments around the core and here’s the important part. These investments are not correlated to the core or each other or at a very low correlation at worst. By using this structure of investment diversification we are looking for growth during the good times and the major focus is protection when we move into bad time in order to minimize losses. Back in the early part of the 2000’s many investors suffered terrible losses because they had placed such a large portion of their portfolio in tech stocks and well we know how that turned out. Securing your financial future is a real thing and it can be accomplished with the right plan in place. You’ve worked hard all your life and tried to do everything right with your investments. Why don’t you come in and talk with us and let us help you make sure you are as safe and secure as you think you are.

Anthony Pellegrino
Principal Goldstone Financial Group

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