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Portfolio Allocation & Benefits

by Todd McLay

December 2, 2022

From the investment team at Precedence Capital - Harbourfront Wealth Management.

It is definitely hard to swallow our pride and realize that we are not smarter than all the other smart people within the industry.  But doing so will lead to much greater success when investing.

Don't take our word for it...The math continues to support the fact that over 95% of investment returns come from what particular asset classes you own within your portfolio, versus the actual individual stocks or securities that you select.

Diversification – Different asset classes with different investment/risk profiles results in lower risk when combined in a portfolio

Low Correlation – With the recent invention of ETFs we’ve seen a big uptick in Fixed Income & Equity correlation, alternatives have low to zero correlation with equity markets and traditional fixed income options, creating a more efficient portfolio.

Reduced Drawdowns – Uncorrelated assets will perform differently at different times. Alternatives perform more consistently with lower volatility, protecting portfolios from large drawdowns or losses.

Risk-Adjusted Returns – With lower volatility than fixed income and equity, but high-income streams, alternatives provide better risk-adjusted returns.Investor

Satisfaction – Lower volatility, reduced drawdowns, and more consistent income streams create a happier, more satisfied client.

The asset classes/companies featured in this article are for illustration purpose only, this should not be viewed as a solicitation of buy or sell. Always talk to a professional before investing to know if the product is right for you. Past performance does not necessarily predict future results, each asset class has its own risks.

Harbourfront Wealth Management Inc. has no liability to readers of this message, and its use is entirely at the risk of the reader. Harbourfront Wealth Management Inc. does not assume any liability for the use or misuse of information contained in this message, or for any errors that may occur in this message. I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone and may not reflect the views of Harbourfront Wealth Management. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by Harbourfront Wealth Management Inc.

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