Our Financial Strategy
Strategic Asset Allocation
Crafting a thoughtful allocation strategy and forming a conviction to its value requires a clear understanding of the purpose and value of asset allocation. The purpose of asset allocation is to provide an environment where a combination of several asset classes results in a higher long-term compound return at a lower risk level than could be earned with a 1- or 2-asset class portfolio. At Ridge Creek Global in Cleveland, OH, we design a carefully crafted allocation to provide that outcome.
The right balance of returns and volatility plays an important role in long-term wealth creation. In general, asset classes with higher returns have higher volatility. What we need to avoid, therefore, is unnecessary volatility. An efficient combination of asset classes, and managers, those with low correlations, will reduce the unnecessary volatility, reduce the amount of time the portfolio is working out of a decline, and will ultimately provide a higher compound return meeting the overall objective of long-term wealth creation and preservation. We incorporate this view into our asset allocation design for clients.