The Evolution of Modern Asset Allocation to Minimize Risk of Loss Without Compromising Opportunity

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett

The Goal of Every Investor

• Almost anyone who invests knows this famous quote from the most renowned long term investor of our time. The notoriety of the quote stems from its focus on the emotions of fear and greed. Surprisingly less is made of the first sentence, “I will tell you how to become rich.” After all isn’t that the goal of every investor – to either “get” rich or “stay” rich?
• Whether you are (a) an individual investor or advisor trying to double your money, or you are (b) a single or multi-family office client or professional responsible for stewarding 100 million dollars or more – or anywhere in between – how you look at the opportunity to grow your portfolio can be very different. Most often Investor (a) is looking primarily for a return on his capital, while Investor (b) is looking to make sure he can sleep well at night knowing he can get a return of his capital when he wants or needs it.
• The current bull market was born on or about March 9, 2009.1 Now in its 10th year, it is one of the longest bull markets on record as measured by the S&P 500, up approximately 3 times the value of where it began, and well above the average bull market duration and return on record going back over 70 years.2 Given lessons learned from investor experiences at the end of the tech bubble in 2000-2002, and the disastrous securitization of subprime mortgages that led to the Great Recession of 2008-2009, is it possible we are experiencing yet another bubble and what does this mean for investors today?

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  Worthy Insights – The Evolution of Modern Asset Allocation