| For many, investing is a haphazard activity. They buy a little of this and a little of that. They get a tip from their friends or broker and in time, end up with a disparate group of securities, and/or funds that they may or may not recall acquiring. They know that this is not efficient but they don’t know what else to do.
Investment professionals are too often guilty of a related sin. The tools to assure efficient diversification are not intuitive so many substitute “lots of different assets” for “lots of diversification”. Sometimes they are right, but luck plays an inordinately large role. It doesn’t have to be like that. |
At PŮR, we optimize diversification. This allows us to allocate assets efficiently. We can often maintain the same level of diversification while increasing a client’s potential for gain. The technique, risk budgeting, is used by sophisticated pension plans seeking to maximize their potential returns. Now individual investors have the opportunity of employing a similar approach with new investment vehicles available in the market. |
