For Every Investor . . . An Investment Style
ASSET ALLOCATION YOUR MOST POWERFUL TOOL A properly diversified portfolio can be your single most effective weapon in working towards your long-term goals, and JHB Financial Associates can offer guidance in the selection of investments that best suit your investment goals.
WINNERS OFTEN CHANGE In addition, a look at top performers and laggards throughout history shows that while one investment style may currently be in favor and appear more desirable and another, no single category captures top honors consistently.
The Callan Periodic Table of Investment Returns
Annual Returns for Key Indices (1989- 2008) Ranked in order of performance (Highest to Lowest)
The performance data presented here represents past performance, and does not guarantee future results. It is not possible to invest directly in an index.
BE PREPARED FOR ALL FINANCIALWEATHER Asset allocation is a financial planning strategy whereby you divide your assets among a mix of investments, in proportions suitable to your personal situation. By allocating assets into different classes, such as stocks and bonds, you have the ability to potentially lessen the risks associated with your portfolio. This principle is based on the theory that asset types respond differently to varying economic environments. Since economic conditions change frequently and unexpectedly, diversifying through asset allocation can help you weather a variety of economic conditions, offering a better relationship between risk and reward.
A PPLYING THE S TRATEGY Of course, asset allocation varies with an investorâ€™s income, age, and goals since these factors will affect the amount of risk an investor is willing to assume. The more diversified or allocated a portfolio is, the less susceptible it is to experiencing sharp increases or decreases at one time. THERE ARE FOUR BASIC STEPS TO ASSET ALLOCATION: 1. Determine your time horizon, financial goals, risk tolerance and investment experience. 2. Review the investment allocation models available with JHB Financial Associates and select an appropriate portfolio diversification mix from among our domestic and international/global investments. 3. Establish a percentage to be maintained for each appropriate category and reallocation structure. 4. Over time, we help you monitor and rebalance your allocations as your goals and circumstances change, and in response to changes in the financial markets. Remember that asset allocation is not a performance guarantee and does not eliminate risk or guarantee success. Diversification does not assure against market loss.
Your asset allocation strategy will depend on several factors unique to your situation, including your risk tolerance, return expectations, investment period and investment preferences. If your goals and objectives are not clearly defined, you may find that your portfolio wonâ€™t satisfy your needs.
ASSET ALLOCATION PROFILES AGGRESSIVE GROWTH Aggressive growth investors are primarily interested in long-term capital appreciation and growth. They are prepared for and comfortable with frequent market volatility because they have a longer time horizon that is better suited to working towards their goals. They expect to have greater risk exposure and in turn greater reward potential.
GROWTH Growth investors want to obtain long-term growth of capital and have little concern for earning current income with their investment. These investors expect more share price volatility due to proportionately greater allocations to higher risk securities.
GROWTH AND INCOME Growth and income investors want to see their principal investment grow over the long-term, as well as earn some dividend income from their investment. They will diversify among stocks and bonds that will help them work towards these goals, as well as reduce overall risk within their personal portfolios. They are willing to tolerate a fair amount of risk, but not as much as if they invested exclusively in the stock market.
INCOME Income investors primarily seek a steady rate of current income from investments such as dividend paying stocks, government-backed securities and corporate bonds. Growth of principal is a secondary concern and should not expose the investor to more than low to medium levels of risk.
ASSET PRESERVATION Asset preservation investors want to achieve maximum current income and preserve their capital investment. They are strongly risk averse and are very conscious of maintaining a stable investment subject to little or no risk. Such investors are often also concerned with liquidity, wanting quick and easy access to their assets. Stock investing involves risk, including loss of principal. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.
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Securities Offered Through Crown Capital Securities Member, FINRA/SIPC
Published on Nov 1, 2010
A properly diversified portfolio can be your single most effective weapon in working towards your long-term goals, and JHB Financial Associa...