Investment Planning, Asset Allocation

Asset allocation is the strategy used in choosing between the various kinds of possible investments, in other words, the strategy used in choosing in what asset classes such as stocks and bonds you want to invest.

A large part of Dugan & Lopatka Financial Services financial planning consists of finding an asset allocation that is appropriate for you in terms of your risk tolerance level and preferences.

Our asset allocation approach is based on the idea that in different years a different asset is the best-performing one. It is difficult to predict which asset will perform best in a given year. Thus, although it is psychologically appealing to try to predict the "best" asset, we consider it risky. Someone who "jumps" from the one asset to another, according to whim, may easily end up with worse results than someone following any consistent plan.  A fundamental justification for asset allocation is the notion that different asset classes offer returns that are not perfectly correlated, hence diversification reduces the overall risk in terms of the variability of returns for a given level of expected return. Therefore having a mixture of asset classes is more likely to meet your wishes in terms of amount of risk and possible returns.

Asset Allocation does not ensure a profit or protect against a loss.

If you would like to know more about our asset allocation approach, give us a call.