How We Invest

Asset Allocation

Ba-Ltd are proponents of Modern Portfolio Theory. The tenets of this theory demands that portfolios are composed of a broad spread of investments which aims to distribute risk evenly across the relevant asset classes. In the event of systemic failure in the markets, such as that which led to the current global economic recession, the chances of catastrophic loss are reduced substantially.

Your Ba-Ltd consultant will already have gauged your tolerance to investment risk and will, consequently, be fully conversant with your individual preferences. Your consultant’s job is to square your investment return expectations with your risk tolerance. This may involve some element of compromise in terms of one or both of these important factors, After all, it is unlikely that a highly risk averse portfolio stands a realistic chance of accruing the highest possible returns.

Asset allocation, correctly used, distributes your investable assets between an appropriate mix of investment categories. The ultimate goal is to:

• Mitigate overall investment risk
• Lay the foundation for more consistency in performance forecasts
• Ameliorate the risk/return tradeoff of your portfolio

The roadmap to success in this exercise involves the choice of securities for your investment portfolio. Staples include securities like stocks, bonds, and mutual funds.

Nearly all investors will appreciate that as risk increases, the potential for return also increases. But, for many, there is a point at which the potential for loss cannot justify the potential for better returns. By deft use of our asset allocation tools, we seek to provide you with the risk/return ratio that is most comfortable.