Asset Allocation and Portfolio Implementation

Asset allocation is a management process that consists of combining various asset classes (stocks, bonds, mutual funds, and more) into a portfolio. Returns are sought from the portfolio as a whole, and not each individual security. This approach to asset allocation addresses potential risk through proper diversification while also pointing your assets toward achieving growth.

While the core goal of a client’s account is to “preserve and protect,” there must be growth. Long-term success for a client is making sure that their money lasts as long as they do. In retirement, there are systematic withdrawals for income to maintain a client’s lifestyle. With this in mind, a portfolio must achieve a long-term rate of return that will either equal or exceed inflation. 

Freeman & Freeman take time to make sure that every client’s income plan is catered specifically and uniquely to them. As a fiduciary, we have an obligation to ensure the appropriate products, services, and recommendations are chosen based on the clients’ best interest. Therefore, we develop your personalized asset allocation model based on individual risk tolerance, objectives, and financial needs. This is where strategic asset allocation comes into play. While every client is managed individually, the accounts are managed with a core asset allocation.

The core component of the account value is centered on market returns. Our strategies, which we manage on a proprietary basis, provide exposure to efficient asset classes that are representative of the broad market of core equities and fixed income.  We also look at specific sectors. There are always individual sectors that are outperforming the broad market. As part of our asset allocation strategy, we look to high quality companies with a history of increasing dividends. These individual issues could be in the form of Real Estate Investment Trust (REIT’s), utilities and some blue-chip stocks that meet the requirement of reducing risk and enhancing returns.

It is important to understand that there is no end all be all to asset allocation. It is a constantly changing landscape and requires constant monitoring. Freeman and Freeman in their role as fiduciaries, screen various investment opportunities to insure they align with client goals and needs while factoring in risk tolerance, time frame, and income specifications.