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At Leonard Wealth Management, Inc. we take an academic approach to all our services. No place is that more apparent than with our investment strategy. Following the research of multiple Nobel laureates in economics, our investment strategy is based on the concepts of Modern Portfolio Theory.
All portfolios start with a core, strategic asset allocation as the foundation of their investment plan. This is represented in an Investment Policy Statement, which details the allocation to different asset classes and the reasoning behind each allocation decision.
The strategic allocation is the model and baseline to be followed. It represents the portfolio best suitable to reach the client’s needs based on all relevant assumptions, desired return and risk tolerance.
The core portfolio is static through time. Changes are made only as additional empirical evidence dictates a need to modify the core portfolio model. This means that the portfolio does not engage in market timing or non-diversified “superior selection” activities.
To over simplify, a Core - Strategic Asset Allocation is the true Buy-and-Hold strategy, with minor adjustments made to keep the portfolio in the proper risk-return balance.
At Leonard Wealth Management, Inc. we take the purest academic approach to implementing a Core - Asset Allocation Strategy. All investment decisions are based on years of academic research and practice.
This strategy follows the principles of Modern Portfolio Theory whose founders were awarded a Nobel Prize in Economics in 1990. Also, the principles of Fama & French’s Three Factor Model are incorporated in our risk averse approach.
Our investment philosophy is best summarized by paragraph 227(a) of the "Prudent Investor Rule," The American Law Institute, 1992:
Investing requires the exercise of reasonable care, skill, and caution, and is to be applied to investments not in isolation but in the context of the portfolio and as a part of an overall investment strategy, which should incorporate risk and return objectives reasonably suitable.
The Prudent Investor Rule was adopted in California as law for fiduciaries and trusts in January of 1996 under Article 2.5 of the Uniform Prudent Investor Act.
The prudent investment strategies outlined by The American Law Institute were taken from the same principles we use to design prudent, risk managed portfolios. We are one of only a few companies who truly brings these investment concepts to investors with portfolios under $50 million.
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