Developing your investment strategy
Balancing risk versus returns is the cornerstone of our investment approach. One approach we take to help manage your investment portfolio's performance is to focus on asset classes and investments with the potential to outperform relative to risk.
While risk increases and decreases over time based on several factors, it never disappears. This is why diversification is an important consideration when seeking to mitigate the risks that uncertainty creates.
Depending on your investment goals and risk tolerance, we may diversify your portfolio with a mix of equities, bonds and real assets.
Asset allocation research
Before we look to improve diversification in your investment portfolio, we start asset allocation research with an overall economic assessment.
We consider the common sources of uncertainty and volatility: interest rates, corporate earnings and trade. There is a strong correlation, over time, between major asset prices and economic growth. Our investment team studies:
- Long-term trends – such as demographics and productivity
- Cyclical trends – including a current reading of the business and credit cycles
- Short-term trends – like monetary policy and projected growth in corporate profits
- Private market and illiquid strategies – possibly providing additional portfolio diversification opportunities
- Impact investing performance – including social, environmental and governance activities