It should be understood that our Investment Method involves asset allocation, which is the combination of different asset classes, capitalizations and sectors in order to minimize risk for a given return expectation. It is not a timing program, which traditionally places the emphasis on maximizing return. The difference is that asset allocation programs will own some securities that are currently out of favor because doing so reduces the overall risk of the portfolio even if it doesn't add to short term performance. Over the long term, a class that is our of favor today may become the key to generating solid returns. Hence, asset allocation forms the foundation for our strong belief in long term investing based on diversification across multiple asset classes, capitalizations and sectors.

While solely owning appreciating asset classes theoretically offers minimal risk exposure, every investment seems to be low risk when the price is rising. Our experience has shown that the true measure of an asset's risk can only be determined over a full market cycle. With that being said, we do want to own more of a particular asset class when market, economic, industry, or interest rate conditions are favorable. Similarly, we would want to lighten up in an asset class if conditions became unfavorable.

By investing accross multiple asset classes, capitalizations and sectors our asset allocation approach does not allow the manager to place all the "eggs in one basket." While this means the portfolio will never be 100% in the "right" class, it also has the virtue of ensuring that 100% of the account is not in the wrong asset class.

Our accounts are managed in one of five main categories according to the investors risk tolerance; Preservation, Conservative, Balanced, Growth or Aggressive.