Address

5987 East Grant Road

​Tucson, AZ 85712

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"The stock market is a device for transforming money from the impatient to the patient" 

- Warren Buffet

Proven strategies backed by imperical evidence.

Fixed Income

Our firm believes that the role of fixed income in a portfolio is not to produce income, but to reduce volatility. Although there are exceptions, the best way to accomplish this is to employ the following strategies:

  1. Generally use shorter maturities (we prefer maturities under five years)
  2. Generally use overweight high quality issues
  3. Use a variable maturity approach
  4. Use a diversified global approach

To learn more visit Our Philosophy or Portfolio Management pages.

The Three-Factor Model
Most finance academics and the informed investment professionals acknowledge that there are three primary factors influencing equity portfolio returns:

  1. The exposure to the overall market (beta).
  2. The percentage invested in large company stocks versus small company stocks. Over time, small company stocks have higher expected returns than large company stocks. Since stocks of small companies are riskier than those of large companies, investors demand a premium for this additional risk.
  3. The percentage invested in growth stocks versus value stocks. Over time, value stocks have higher expected returns than growth stocks. Value stocks are those that sell at lower prices relative to their earnings and book values. They are perceived by investors to be riskier than growth stocks so investors demand a premium for this risk as well.

To learn more visit Our Philosophyor Portfolio Management pages.

We Are Registered Investment Advisors (RIAs):

Financial investment advisors who have been through certain training, agrees to abide by legal rules, including ensuring that recommendations and trades made on your behalf are in your best interest.

Investment Model Descriptions

Contact

Office: 520-296-1035

Toll Free: 1-888-984-9422​

Modern Portfolio Theory


In 1990, Harry Markowitz, William Sharpe, and Merton Miller, three noted financial economists, who won the Nobel Memorial Prize in Economic Sciences for their work in developing Modern Portfolio Theory as a portfolio management technique. Modern Portfolio Theory has been successfully used to develop and manage investment portfolios for large institutions, as well as individual investors. There are four components to Modern Portfolio Theory.

Investors inherently avoid risk. Investors are often more concerned with risk than they are with reward. Rational investors are not willing to accept risk unless the level of return compensates them for that risk.
Securities markets are efficient. The "Efficient Market Hypothesis" states that financial markets are “informationally efficient”, or that the prices on traded assets already reflect all known information. Assets are re-priced every minute of the day according to the latest news. As new information enters the market, it is quickly absorbed into the prices of securities, and thus hard to capitalize on. Information technology advancements and increased investor sophistication will cause the markets to become routinely more efficient over time.  The implications of the Efficient Market Hypothesis are significant for investors. It implies that one should be deeply skeptical of anyone who claims to know how to "beat the market." One cannot expect to consistently beat the market by picking individual securities or by "timing the market".  The Efficient Market Hypothesis contradicts many traditional investment strategies. It has, however, been supported by numerous academic studies, both theoretical and empirical. These studies show, among other things, that the risk-adjusted returns achieved by professional investment managers do not outperform the market as a whole. This was primarily due to the expenses and taxes incurred with active management. That's the bad news. The good news is that the rate of return of the capital markets is relatively good (10%+ over time)
Focus on the portfolio as a whole and not on individual securities. The risk and reward characteristics of all of the portfolio's holdings should be analyzed as one, not separately. An efficient allocation of capital to specific asset classes is far more important than selecting the individual investments. 


Every risk level has a corresponding optimal combination of asset classes that have the highest expected returns possible. This is called the "Efficient Frontier". Portfolio diversification is not so much a function of how many individual stocks or bonds are involved, but the relationship of one asset’s behavior to another. We call this relationship "correlation". The higher a correlation between two investments, the more likely they are to perform in a similar fashion.  The efficient frontier represents the range of hypothetical portfolios that offer the maximum return for any given level of risk. Portfolios positioned above the range are unachievable on a consistent basis. Portfolios below the efficient frontier are inefficient portfolios, because for the same risk one could achieve a greater return. The ideal portfolios exists somewhere along the efficient frontier.   To learn more visit Our Philosophy or Portfolio Management page.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Allied Portfolio Management, Inc., to provide information on a topic that may be of interest.  
The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.  Past performance is no guarantee of future results.  Investment advisory services  are offered through Allied Portfolio Management, Inc., an investment advisor registered with the SEC.  Allied Portfolio Management, Inc. does business in Tucson, Arizona.  Allied Portfolio Management, Inc. and its affiliates do not provide tax or legal advice. Allied Portfolio Management, Inc.'s advisors may transact business and/or respond to inquiries only in state(s) in which they are properly registered and/or licensed. The information in this web site is not investment or securities advice and does not constitute an offer. 
Allied Portfolio Management, Inc.

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