Asset Allocation

At Rivers Investment Management, we are passionate about Asset Allocation.  It's at the heart of everything we do. 

Investment decisions can be based on current events and our emotional reactions to them or they can be based on sound financial principles.  One of those core principles is asset allocation.  While asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns, it can form a foundation that will guide your decision making in good times and bad.

Asset allocation is the process of deciding how much money goes into each investment category.  There are several categories and sub groups to consider, such as stocks-bonds-cash, value-growth, large-medium-small sized companies, US-international.

While most people try to practice diversification, many have still not achieved an appropriate asset allocation.  It's not enough to simply spread your money in a variety of investments.  Asset allocation is a much more specific process of finding the most appropriate blend of the different investment categories.

At Rivers Investment Management, we believe the selection of individual securities should come much later in portfolio construction.  You must first decide how much of a percentage you are willing to commit to each investment category. 

Global/International investing involves risks not typically associated with US investing, including currency fluctuations, political instability, uncertain economic conditions and different accounting standards.  Stocks of small companies are typically more volatile than stocks of larger companies.  They often involve higher risks because they lack the management expertise, financial resources, product diversification and competitive strengths to endure adverse economic conditions.  Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.  Past performance is no guarantee of future results.