Investment Management

Financial planning and asset management are two sides of the same coin. The investment portfolio planning process begins with developing your financial plan.  Through that process we discover information crucial to the managing of your investments: your personal risk tolerance, your time horizon, and your specific financial goals. With that understanding we can build a customized portfolio designed around your needs.

Our Philosophy and Process

Risicare…the early Italian form of the word, risk.  It means, to dare. 

The effective management of an investment portfolio requires the effective management of risk. Every investment comes with the possibility of a loss of capital. However, the type and level of risk varies widely across investments.  Diversifying risk is not accomplished simply through the purchase of many investments.   It is accomplished through the purchase of investment with varying risk characteristics that cause the investments to perform differently from one another in different environments. Legacy’s 3 phase portfolio design process seeks to do just that by purchasing a mixture of asset classes which are further divided into sub-asset classes by geography, duration, structure, use, perception and valuation.  Allocation across these asset classes is done through a determination of risk and value.

Phase 1 – Allocation Across 7 Major Asset Classes

The first phase involves dividing assets up among the 7 Major Asset Class.  These classes historically have had low correlation to one another and therefor assist in providing portfolio diversity.  This stage of the process is solely about managing risk.

7 major Asset Classes

*For illustration purposes only…allocations will vary per client.

Phase 2 – Allocating Sub Asset Classes 

Each Major Asset Class has multiple Sub-Asset Classes. The next stop in our process is to divide assets among these sub-asset classes. This is a continuation of risk management and opportunistic sectors will be overweighted.
 

Equity Sub-Asset Classes
Expressed as a % of Total Portfolio

Growth

7.5%

Value

10%

Emerging Markets

10%

BRIC

5%

Healthcare

2.5%

Technology

0%

Deflation Hedge

5%

*For illustration purposes only…allocations will vary per client. 

Phase 3 – Investment Selection

The final step is selecting and allocating specific investments. We believe in using the investment vehicle that best accomplishes the goal in any given position.  We do not limit our choices by strictly choosing between active management and passive management or by selecting one specific vehicle to use (such as mutual funds only or ETF’s only).  We recognize the differing characteristics of these investment vehicles and utilize those characteristics to our advantage. At any point in time our portfolios could contain:

Mutual Funds Bonds
Electronically Traded Funds Unitized Investment Trusts
Closed End Funds Private Equity
Stocks Preferred Shares

This flexibility assists us in maximizing return and managing risk by selecting investments with the greatest growth potential and a margin of safety.

Past performance is not a guarantee of future earnings. Asset allocation does not assure a profit or protect against loss in a declining market. Percentages represented here are an example of what a portfolio may look like. Accrual weightings will vary and are influenced by client’s age, risk tolerance, liquidity needs, income and net worth.