Asset Allocation

Armed with the knowledge of each client’s risk and return objectives, and the individual goals unique to their situation, Modus Advisors develops an asset allocation strategy.  This strategy combines investment categories with different risk and return characteristics, which is the concept of diversification.

Diversifying Your Portfolio

By diversifying your portfolio, we attempt to reduce risk and smooth out returns. A diversified portfolio should include different types of stocks and bonds, cash investments, and alternative investments with a low correlation to stocks. View our sample diversified portfolio.

When assets are combined together in an optimal way, the asset allocation can produce the highest level of return for a given level of risk.  Investing in securities involves risk including possible loss of principal, and asset allocation does not ensure a profit or guarantee against loss.

Portfolio Rebalancing

Portfolios are developed using one of five asset allocation strategies, ranging from conservative to aggressive growth.  The initial allocations in a portfolio will fluctuate over time, as the returns of each position will vary. 

By reviewing and rebalancing your portfolio on a regular basis, we strive to make sure your investment allocation is consistent with your objectives and risk tolerance. Regular rebalancing of the portfolio, combined with continual review of the investment categories, keeps the portfolio in line with the client’s objectives. See our example of portfolio rebalancing.