GoodWin Asset Management, Inc

 Professional Wealth Management Firm

ASSET ALLOCATION

Asset Allocation is the process of dividing investments among different kinds of asset classes, such as stocks, fixed income, international equities, real estate and cash & cash equivalents. Capital preservation and appreciation strategies will be designed to accommodate any cash-flow requirements.   

GoodWin believes asset allocation decisions are highly individualistic. GoodWin, being a conservative equity manager also believes in allocating the equity portfolio among various sectors and markets depending upon your measure of wealth, source of wealth, time horizon, liquidity requirements, tax constraints, any legal constraints and several other factors as individually applicable.    

The purpose is to construct a fully diversified portfolio that would minimize risk and maximize return in the long term. Market sectors, economies and individual securities with very low correlation are chosen to realize this objective.

Assets are continuously monitored and reallocated in the process of active portfolio management.  The overall portfolio is constructed to fit the risk/return profile of the client.

Professional asset allocation strategies is most important aspect of successful investment management.  It accounts for a large part of the variability in the return on a typical investor's portfolio.  This is especially true if the portfolio is invested in multiple asset classes - each including a number of securities.  A study of 97 large pension funds by Brinson, Hood and Beebower found that 87% of the differentials in their performances could be explained by the differences in the weightings given to the various asset classes within their respective portfolios.

GoodWin uses both Strategic & Tactical Asset Allocation strategies to efficiently optimize the investor's utility.  A combination of these two strategies helps build a customized portfolio meeting the investor's objectives both in the short and long-term.  

The proportion of allocation among various sectors and markets entirely depends upon the client's risk aversion factor, the time horizon, source of wealth, income needs, tax bracket, legal issues and unique circumstances.    Hence your portfolio will have an individualized allocation depending upon your profile, risk characteristics and return preferences.  

GoodWin taking the fiduciary responsibility of managing assets for the clients looks at the overall wealth distribution of the client in making the asset allocation decision.  Once the optimum asset allocation is chosen and agreed upon, the Portfolio Manager, makes any tactical asset allocation decision to make use of market opportunities.  However, GoodWin strongly believes in adhering to the guidelines of the client's portfolio and any major deviation is discussed and approved by the client before it is implemented.

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Copyright © 2006 GoodWin Asset Management, Inc.
Last modified: 06/24/08