Investment Management Process

The Pinkerton Wealth Management team believes four foundational investment principles can help control risk in an unpredictable world:

Investment Principal 1

Make sure you have enough safe assets to cover five years worth of spending.  You want to avoid having to sell variable investments during a panic.   In nautical terms, make sure you have a deep ballast to stabilize your portfolio in a storm.

Investment Principal 2

Strategic Diversification -- Carefully blend global stocks, bonds, cash, commodities, real estate and alternatives into an optimum risk-adjusted allocation based on historic and predicted performance; diversify investment styles and managers.  In nautical terms, make sure your hull is broad and diversified so it can take a hit in one area and not sink the entire portfolio.

Investment Principal 3

Have a long-term economic outlook that is reflected in asset allocations and investment selections.   Our current thematic overlay is that we are experiencing a long-term period of slow growth with rising inflation.  Our overlay is predicated on a deleveraging world, changing demographics and growth in the emerging economies.   In nautical terms, know the likely weather patterns before you set sail.

Investment Principal 4

Have a portion of a portfolio tactically (short term focused) managed to intelligently take advantage of potential opportunities while being able to shift to asset preservation quickly.  In nautical terms, make sure you use a jib sail to keep the portfolio moving in various conditions.

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