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Investment Planning
The Absolute Return Portfolio™ |
We developed The Absolute Return Portfolio™ with one goal in mind, positive returns every year no matter what the markets are doing. To those whose only experience is with traditional advice and investments this goal may seem impossible, but the very wealthy have been achieving this exact result for decades.
Over the years, we’ve reviewed hundreds of portfolios as part of our Total Wealth Solution™ process. Most of these portfolios were either designed by traditional advisors like stock brokers, or the clients themselves. They have one thing in common; they use traditional investments like stocks, bonds, and mutual funds in a relative return portfolio.
What does that mean? The best way to explain a relative return portfolio is with an example:
Let’s say a portfolio is using the S&P 500 as a benchmark. If the S&P 500 is down 25% in any given year and the portfolio is only down 15% that represents a good relative return.
We’ve never met anyone who thought losing 15% was a good thing, yet that’s exactly the philosophy that traditional advisors and mutual fund managers live by. It’s no wonder that many investors get frustrated in down markets and look for better alternatives, because their traditional advisors can’t protect them from market downturns. The Absolute Return Portfolio™ was developed to insulate investors from the worst that the market has to offer.
The keys to The Absolute Return Portfolio™ are the Investment Policy Statement and the use of non-traditional and low-correlation investments. Institutional investors routinely use Investment Policy Statements, yet since 1990, we have never met an individual investor who had one. Simply put, an IPS is a statement of exactly what the client expects from their portfolio, including what they are willing to invest in, what their expected return is and how much risk they are willing to accept. The result is a detailed investment game plan that helps clients set realistic goals and makes the advisor accountable for reaching those goals.
Low-correlation and non-traditional investments protect a portfolio from market downturns, because they behave independently of the markets. By introducing these types of investments into The Absolute Return Portfolio™ we are able to protect against most losses in down markets and still achieve strong returns in up markets.
While it is not possible to guarantee against any loss under all circumstances, The Absolute Return Portfolio™ takes the fear out of the investment process by building a safety net under our client’s investments.
Click Here to schedule a No Obligation meeting with Robert L. Iola, Jr., architect of The Total Wealth Solution™, to learn more about The Total Wealth Solution™ and how you can benefit.
