Seize the Day with DIAS™: Dynamic Investment Allocation Strategies

Global Wealth Management | Retirement Income Planning

At Global Wealth Management, we’ve spend all our time finding ways to help our clients maintain and grow their wealth. Dynamic Investment Allocation Strategies, or DIAS™, help us do that – and we’d like to let you in on how it works. These tactical investment strategies are based on the principle that it’s better to actively allocate capital to the most attractive, risk adjusted asset classes than to simply pick the stock, bond manager, or mutual fund that’s performed best in the past. As legal disclaimers rightly say, past performance is no guarantee of future outcomes.

The most important part of investment management is deciding how much capital to allocate to each asset class – and the second most important part is deciding which to avoid. We like the ability to adapt to market changes by having flexibility to invest across a range of asset classes, which allows us to target upsides and limit downside losses. Using DIAS™ works best in liquid markets – markets with many bids and offers, in which executing a trade at desirable prices can be done quickly since there are so many buyers and sellers. Liquid securities markets tend to have their ups and downs in cycles driven by “human factors,” and with active allocation, we can take advantage of these trends. Dynamic diversification means we seek to move between market cycles of different, non-correlated asset classes to provide consistent, lower volatility returns by combining returns from asset class cycles moving in different directions. If one asset class is moving up, and another is trending down, we’re there to take advantage of both.

This may sound like the kind of fast-paced stock market trading from which retirees are often warned to stay away, but this method actually works very well for conservative investors. We go for returns that are more consistent and less volatile, which may not be as impressive in the short term, but add up. In both the 2008 Credit Crisis and the 2002 burst of the Dotcom bubble, we were able to…

 
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