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Clear Thoughts
99.5% Invested
Originally Published Friday, May 20, 2005
| Clear Asset Management chooses to be fully invested in stocks. We provide style pure exposure to the equity markets and we remain committed to these portfolios regardless of market conditions and strive to provide benchmark beating returns. |
Clear Asset Management is on average 99.5% invested. Some investors have posed the question; why in difficult markets, would we not keep a percentage of the portfolio in cash? Our response is simple; our job is to be fully invested.
We are investment managers, not financial advisors and therefore we do not asset allocate for investors. Asset allocation is the process of dividing investments among different kinds of assets; such as stocks, bonds, real estate, venture capital and cash (for example). The goal of asset allocation is to optimize the risk/return performance based on the specific situation and goals of each investor. Simply put; how much money should an investor keep in cash, the market, bonds, etc.
Timing the market is challenging, perhaps impossible, and a range of market exposure based on the needs of each person or organization is usually the result of asset allocation. Also, based on historic returns and an investor's time horizon, achieving projected returns may require exposure to multiple asset classes with the allocation constantly changing.
There are excellent independent financial advisors who can help individuals in the asset allocation process. Many CPA firms also provide risk analysis and financial planning services. Asset Allocation is one of their deliverables, usually depicted as a pie chart showing how an investor can diversify and allocate his or her overall net worth into different asset classes. Several slices of the pie are equities (stocks) and can be filled with precision by using Clear Asset Management portfolios.
Our job at Clear Asset Management is to provide pure style exposure to equities, translated; we hold stocks that strictly adhere to the style of management and investment objective we promise, such as Small Cap Value or Large Cap Growth. We do not drift from the style even when it is out of favor. We simply seek to outperform the benchmark in all market conditions; to provide superior asset management services.
This is the same methodology used to manage the portfolios of the largest institutions, pension funds, and of course the portfolios of the wealthiest people in the world.
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