The particular percentage of assets allocated to each portfolio depends on market conditions and a client’s risk tolerance. Our goal is to have exposure to the strongest asset classes by using an adaptive strategy that changes over time. We consider a wide range of asset classes, including domestic equities, international equities, commodities, foreign currencies, fixed income and cash alternatives.
We then also consider sectors within each asset class – for example in the domestic equity asset class, there are sectors such as energy, utilities, healthcare, technology and others. We compare them on a relative strength basis and then rank them from strongest to weakest based on point-and-figure charting to determine where assets should be allocated. Another example would be in the International Equity asset class, where one would differentiate between countries.