Investments & Retirement Planning
OUR PHILOSOPHY
Overview
According to a 1991 study by Brinson, Singer, and Beebower, 91.5 percent of a portfolio’s performance can be attributed to asset allocation. The other 8.5 percent is attributed to other factors such as market timing and securities selection. The Bank of Missouri Investments & Retirement Planning group adds value to our clients' portfolios by focusing on asset allocation.
Many portfolio managers try to add value by being the “stock picker” or “market timer.” But, very few have been able to consistently add value with those tactics. In fact, we have received many portfolios that are extremely over-weighted in large cap stocks because those were the familiar names that a client would know. Even though we utilize a core allocation to domestic large cap stocks, we keep it in perspective to a well-balanced and diversified portfolio. Over time, small cap, international, and emerging markets have all seen gains above traditional U.S. large cap growth stocks. Failure to fully allocate across all sectors can reduce performance and add volatility to the portfolio.
Equities
Since our strategy is centered around asset allocation and diversification, we utilize mutual funds and exchange traded funds (ETFs) as our primary equity investment vehicles. We use only non-proprietary, no-load, institutional funds that provide the highest returns with low cost. This not only ensures that we are finding the best performers, but eliminates the emotional attachment to any individual stock.
Fixed Income
Our bond allocations include building laddered maturity schedules with individual treasury or corporate bonds. We also use bond mutual funds to further diversify and protect the portfolio. One of the research tools we use in finding and building these portfolios is ValueBond, which analyzes all available bonds and shops numerous brokers to obtain the best settlement pricing. TOP