• "If past history was all

    there was to the game,

    the richest people

    would be librarians."

    ~ Warren Buffett
  • "The investor's

    chief problem -

    even his worst enemy -

    is likely to be himself."

    ~ Benjamin Graham
  • "The four most

    dangerous words in

    investing are:

    ‘this time it's different.’"

    ~ Sir John Templeton
  • "The individual investor

    should act consistently

    as an investor and

    not as a speculator."

    ~ Benjamin Graham
  • "An investment

    in knowledge pays

    the best interest."

    ~ Benjamin Franklin

Investment Philosophy

Modern Portfolio Theory

In 1990, the Nobel Prize for Economics was awarded to three noted financial economists for their work in developing Modern Portfolio Theory (MPT) as a portfolio management technique. According to MPT, investors are inherently risk averse – not willing to accept risk unless the potential returns generated sufficiently make up for taking these risks. In addition, MPT shifts the focus away from individual security analysis toward the efficient allocation of capital across specific asset classes. At Gemmer, we use these concepts to help our advisors design their client portfolios and manage their accounts.

Why does asset allocation matter?

Simply defined, asset allocation is the act of spreading investment dollars over a number of investment vehicles – diversifying those dollars – to obtain the best possible risk/reward trade-off that will have a lasting impact over time. Investment vehicles fall into four general categories, which are the pillars on which all portfolios are built:

 

Domestic Stocks Foreign Stocks Bonds and Cash Other
Large-Cap Growth Emerging Markets High-Yield Commodities
Large-Cap Value Latin America Investment Grade Alternatives
Mid-Cap Blend Pacific Rim Short Term Long/Short
Small-Cap Blend Developed Countries Foreign Absolute Return
Real Estate Europe Cash  
Special Situations Japan    

 

How do we construct your clients’ portfolios?  Read about our two stage approach: Tactical Asset Class Shifts and Manager/ETF Selection.

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