Cornerstone’s Quint-Essential Strategy PDF

1. Dynamic Risk Management
“It is not what you make, it is what you keep.”
Too often investors forget this old Wall Street adage. At Cornerstone, Risk Management is our first priority.

We do this through a variety of strategies including asset allocation, diversification, negatively and non-correlated assets and inverse market positions to hedge everything from stocks and bonds to special situations.

2. Real World Diversification
Many will tell you that diversifying among small/mid/large cap stocks is diversification. However, they are all still stocks. It is not Real World Diversification.

Clients’ portfolios are not limited to just stocks and bonds. Cornerstone’s managed portfolios are diversified among other asset classes including hard assets, precious metals, currencies, emerging markets, foreign bonds as well as hedge positions.

We will utilize stocks, bonds, ETFs and mutual funds. For further risk management, we also hold multiple securities within each asset class.

3. Pro-Active Asset Allocation
Our asset allocation is not static.

We may raise and lower the target allocation of asset classes in anticipation of changes in market and economic conditions and as our proprietary research indicates. Unlike others, we do not have any pre-set minimum or maximum allocation to any asset classes.

As the economy changes, and markets move, sectors that may be overweighted today may be underweighted in the future and sectors that have little allocation today may be overweighted in the future.

Buy n’ Hold ended with the 20th Century. Today’s strategy needs to be more proactive and flexible.

4. Strategic Re-Balancing
On a regular basis, we re-balance portfolios to keep any asset class from dipping too far below or going too far over our target allocation.

Our extreme discipline forces us to sell a portion of the allocation of asset classes that are outperforming and have advanced above out target allocation and buy securities in the classes that are under performing. Such a discipline allows us to buy some assets while they are low and sell some when they are high.

We also have a sell strategy for most securities. We have “if, then” scenarios for most investments and a plan to sell as circumstances dictate.

5. Invest For the upside or the downside? Yes.
Markets don’t always go up and bear markets can last years. So why can’t one play both sides? One can. The old policy of buy n’ hold is about as out dated as the Model T, as evidenced by 2008’s gyrations which wiped out a decade of stock market gains. So investors that are long only, or buy and holders, end up watching their portfolios deteriorate or have to switch to cash.

Today, investors can employ a strategy for long term market declines through the use of inverse and bear market ETFs and mutual funds.

We utilize inverse funds to hedge the risks of a portfolio and to profit from market declines. No longer does an investor have to fear or fight a bear market. It is just another part of the overall market cycle and one for which we have developed investment strategies.

QUINT-ESSENTIAL STRATEGY

PORTFOLIO ALLOCATION CHOICE'S

PORTFOLIO CONSTRUCTION

MODEL FOR INCOME

ECONOMIC CYCLES

INVESTMENT PRINCIPLES

You will need Adobe Acrobat reader to view some reports
Acrobat Reader