Asset Management

Asset Management

At Intelligent Design Advisors we combine the traditional approach to asset management with a robust set of satellite strategies designed to bring clients' results in line with their expectations. 

Traditional asset allocation, like any investment strategy has its limitations.  Asset risks are often misunderstood, which inevitably leads to poor decisions.  This can cause unrealistically high investment return expectations or taking on excessive risk.  In either case, the end result is that the client is less likely to achieve their goals.

Asset allocation is the process of selecting a mix of asset classes that closely matches an investor’s financial profile in terms of their investment preferences and tolerance for risk.  It is based on the premise that the different asset classes have varying cycles of performance, and that by investing in multiple classes, the overall investment returns will be more stable and less susceptible to adverse movements in any one class.

All investments involve some sort of risk, whether it’s market risk, interest risk, inflation risk liquidity risk, or tax risk. An individualized asset allocation strategy seeks to mitigate the risks of any one asset class though diversification and balance. 

Traditional Asset Allocation

When done properly, an investor’s allocation of assets will reflect their desired goals, priorities, investment preferences and their risk tolerance. Asset allocation is an individualized strategy, so there really is no perfect mix of assets.  Everyone's strategy is built on the careful consideration of the key elements of their financial profile:

Investment Objectives: What the investor hopes to achieve using his investment capital, e.g. – improve current lifestyle; achieve capital growth; fund a specific goal, such as a college education

Risk Tolerance: This reflects the investor’s comfort level with market fluctuations that can result in losses.  Inflation risk and interest risk need to be considered as well.

Investment Preferences: An investor may prefer one asset class over another based on a certain bias or interest towards the characteristics of that class.

Time Horizon: The length of time an investor is willing to commit to achieving his objectives.

Taxation: Investing in a mix of asset classes will have varying tax consequences.

Satellite Strategies

Some clients prefer to add additional considerations to their investment mix.  When those considerations fit within their overall financial plan it provides an opportunity to enhance the investing experience.

Tactical Allocation: Is for clients that would like a more active investment management experience designed to further control risk and take advantage of market opportunities on an intermediate time frame.  It combines a static allocation to more active managers with additional handpicked opportunities identified by our research.  Tactical allocation seeks long-term risk adjusted growth.

East Slope Equity: Is an active multi-time frame approach to the equity markets.  East Slope Equity seeks to maintain equity exposure but may hold substantial cash during periods of market stress or in overextended markets to limit downside risk.

Game Plan: Seeks to obtain positive quarterly returns regardless of the market environment.  Game Plan is a highly active strategy that can purchase ETFs in most asset classes and can also be short various markets via inverse ETFs.

Intelligent Design: Seeks to obtain positive quarterly returns regardless of the market environment while also trying to enhance total return.  Intelligent Design is a highly active strategy that purchases individual stocks and can also buy ETFs in most asset classes.  Intelligent Design can be short various markets via inverse ETFs.

An Intelligent Strategy

A sound investment strategy includes periodic reviews.

About the only certainty when it comes to the financial markets is that they will change, and so will your financial situation.  Through market gains and losses, a portfolio can become unbalanced and it may be important to make adjustments to your allocation.  As people move through life stages their needs, preferences, priorities and risk tolerance change and so too must their investment strategy.   

Learn more about asset allocation by contacting us today.