Diversification using asset allocation is an important tenant of REDW Stanley’s investment process. We use modern portfolio theory to construct the best portfolio for each client’s goals and objectives and risk tolerance. We use a number of different asset classes to achieve diversification. Allowing asset allocation to work over a market cycle is one key to successful investing.

To illustrate this point, see the difference asset allocation can make for an investor who began with an investment of $10,000 and maintained their asset allocation over the time period from December 31, 1983 to December 31, 2008:



Chart Source: Ned Davis Research, 12/31/08. These charts are for illustrative purposes only and do not predict or depict the performance of any investment.

Thinking long term during a difficult market cycle is contrary to human nature, but this challenging market cycle will pass. Time and opportunity are basic precepts of asset allocation. Fear and greed are powerful human emotions. Our role is to help you navigate through these challenging times and to act rationally and logically. Turn off the TV and look forward. Reevaluate your risk tolerance and, if necessary, your asset allocation. Try to think in terms of years. It is hard to do, but positioning your portfolio correctly now can contribute to achieving your future goals and objectives.

To learn more about positioning your portfolio to achieve your future goals, please contact REDW Stanley Financial Advisors today at 505.998.3200.

This information is brought to you by REDW Stanley Financial Advisors LLC, an SEC registered subsidiary of REDW The Rogoff Firm.