Implementing an Active Asset Allocation Strategy

by Ken Faulkenberry, Principal and Chief Investment Officer, Arbor Investment Planner


If flexibility makes an active asset allocation strategy superior to a simple buy and hold strategy; then the next question is: How does an Investor implement a successful active asset allocation strategy?

The key to a successful active asset allocation strategy is determining what the most effective mix of investment opportunities is. Diversification among different asset categories is crucial. The Arbor Asset Allocation Model Portfolio (AAAMP) uses 4 simple categories, Global Income, Dividend Growth, Aggressive Growth, and International Growth. Each category can be further divided into subcategories (i.e. Large Cap, Mid Cap, and Small Cap. etc.).

The key benefit of an active asset allocation strategy is the ability to change your asset allocation in asset categories, subcategories, and individual investments. Economics, politics, and the volatility of the market itself, change the opportunities and risk of each asset allocation. Therefore it takes time and knowledge to properly research the investment climate and the different opportunities and risk involved with each. It is no different with any another investment strategy except the opportunities and the research are ongoing.

Determining which assets maximize potential rewards and minimize risk make knowledge and research a critical part of any investment strategy. In general, individual Investors have not been successful because they either invest in institutions (i.e. mutual funds, pension plans) that implement a buy and hold strategy and/or over diversify; or lack the time, resources, or knowledge to make proper asset allocation decisions.

One solution is for Investors to manage their own portfolio with the help of a portfolio management service such as the Arbor Investment Planner. The Arbor Asset Allocation Model Portfolio (AAAMP) is the real-time portfolio of the AIP, for the benefit of its’ Subscribers. The AAAMP carefully looks for areas of opportunity where prices may not reflect their real value or potential. Investments are placed in the proper asset allocation category and constantly monitored to stay properly diversified at all times. This takes time and knowledge to research economics, politics, and markets worldwide.

The Arbor Asset Allocation Model Portfolio (AAAMP) has successfully navigated the volatility of the past decade with an active asset allocation strategy. The results have been very low volatility and excellent returns for those who have chosen to take advantage of the Arbor Investment Planner.

The Arbor Investment Planner is not a get rich quick strategy, but a disciplined, methodical, and conservative strategy with a track record of out performing and less risk than the market.

To further investigate the Arbor Investment Planner, I invite you to read the portfolio management articles on my blog and connect with me on Facebook.

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