Risk vs. Reward

Solutions For Managing Risk
Our Asset Allocation portfolios are designed to make the process of portfolio diversification easy, efficient, and forward-looking.

Balancing Growth and Capital Gains

When it comes to comparing the risk vs. reward in your investment portfolio, the process of dividing your investments among asset categories can help balance the results. In general, your portfolio should include various types of investments that are expected to perform differently during particular economic conditions. By using asset allocation strategies, it is expected that a decline in any single investment may potentially have a lower impact on your overall portfolio, and it may potentially be offset by increases in other investments. While asset allocation alone cannot ensure against loss, we recommend speaking to your investment manager about the risk vs reward to allocating your portfolio, and keeping it balanced in the future.

Risk Management Essentials

One of the primary functions of Asset Allocation is to manage risk.
Chart is for educational purposes and should not be considered as a recommendation for your own portfolio. Each clients situation is different based on suitability. Contact your investment management team for details.

1. See Brison, Gary P., Hood, Rudolph L., and Beebower, Gilbert L. (1986). “Determinants of Portfolio Performance,” Financial Analysts Journal vol. 42 (4), July/August pages 39-44 (reprint, 1995, Financial Analysts Journal 51 (1), pages 133-138, 50th Anniversary Issue). Gary P. Brinson, Brian D. Singer, and Gilbert L. Beebower, 1991, “Determinants of Portfolio Performance II: An Update,” Financial Analysts Journal 47 (3), pages 40-48; Roger G. Ibbotson and Paul D. Kaplan, 2000, “Does Asset Allocation Policy Explain 40, 90, or 100 Percent of Performance?”, Financial Analysts Journal 56 (1), pages 26-33.

2. The model portfolio’s asset class weightings may deviate from the sample allocation shown.