At Maguire Asset Management, we believe that there is no best “asset allocation model.” We believe asset allocation decisions are unique to specific investment objectives, constraints, and risk tolerances. At the same time, we believe that investors should construct a broadly diversified portfolio with exposure to:
- Fixed Income
- Equities
- Domestic
- International
- Alternative Investments (e.g. hedge funds, real estate)
We carefully construct a high-quality bond portfolio to meet near and intermediate term income needs.
After liquidity needs have been satisfied, we split the remaining funds between equities and alternative investments. Alternative investments continue to grow in popularity and when used properly can increase returns and reduce overall portfolio volatility.
Rebalancing
We believe formal rebalancing rules are fundamental to successful investment management. Over time, specific asset class performance can create over and under-weighted asset classes. Although counter intuitive, decreasing the allocation to outperforming classes and increasing the allocation to under performing classes can increase portfolio returns and lower portfolio volatility.