Investment Strategies

DIVERSIFICATION and PATIENCE are vital when investing for long term gain

Asset Allocation Strategy – One Step Further

A simple portfolio could be constructed consisting of “US Equity” and “Fixed Income,” with each asset class represented by one security; an index to the US Market and an index to the US bond market. It is our belief that this portfolio’s performance can be enhanced by Falcon Capital Management, Inc.’s strategy of sector diversification.

Equity Strategies – Sector Diversification

Within the US and International Equity allocations, there is clear evidence of factors which enhance returns. By taking on true systematic risk, one can be compensated more. These factors have been clearly identified by academic research and ultimately provide the basis for building a true “style diversified portfolio”. What are these factors and how are they used? Simply stated, they are “value” (oversold stocks and “small capitalization stocks”).

Value can be thought of as lower-priced stocks relative to their book values while growth stocks are higher-priced stocks. Taking this one step further, the cost of capital of excellent companies (high-priced stocks) is lower than un-excellent companies (low-priced stocks).