As our quarterly re-balance approaches, we will be making a few changes to our model allocations. The changes are small, and they will have only a minor impact on each model.
The ongoing trade issues are of concern. All parties seem to be willing to engage in ever greater measures to take punitive steps against the other. At some point, the economic or political damage will cause concessions by one of the parties, but as of today we’re still on a dangerous path. If the US and China feel they are both acting from a position of strength, then further escalation is likely to result.
And so, our new quarter allocations will reflect a small decrease in our large cap position in favor of increased allocation to the SMID cap part of each portfolio. The logic for doing so is obvious and easily understood.
Next quarter’s allocations will also reflect a minor decrease in our foreign developed allocation as this segment of the world economy seems to be caught in the middle of the brewing global trade war. The stitches holding the EU together seem to be getting pulled apart on many fronts, as nationalism continues to make Europe appear less cohesive and therefore less poised for growth.
Speaking of performance, one of the best areas of performance for the 2nd quarter has been the real estate allocations. After poor performance throughout much of last year and during the 1st quarter of this year, it has rebounded nicely and shaken off the effects of several rate increases. Perhaps it will be more correlated to inflation rather than bonds going forward.
Lastly, I’d like to mention the performance of our bond portfolios during the 1sr and 2nd quarters. Though not among the leading group in terms of absolute return, the fixed income portion of the models has held up extremely well in an environment of rising interest rates. The stability offered by this part of the models has been well received by clients desiring lower volatility in their portfolios.
Thank you to Jim Kaffen and SIA (Sortino Investment Analytics) for contributing to all of these efforts.
Our upcoming rebalance will occur on August 1st. As I have mentioned in many of my past posts, I do not expect much turnover in the funds we will be using for the 3rd quarter. Only the small changes mentioned above will be made to our strategic allocation.
Thank you again for your support of our efforts here at SCI. Many of you have reached out to me with suggestions and concerns to help make our platform better, all have been well received. Making SCI work for you and your clients is our primary concern and any comment you may have, no matter how small it may seem, is always welcome.
SCI HIGHLIGHTS
SCI Quarterly Rebalance:
August 1
Please consider risk profiles and model mapping along with any cash management needs for your SCI clients as we move toward the SCI Quarterly re-balance.
If a client needs to make a model change or any upcoming cash distribution requirements, please let us know.
Monthly SCI Webinar
OUR NEXT SESSION IS:
Tuesday, August 14th @ 12pm CDT
The upcoming SCI webinar session will feature a breakdown of the August 1st rebalance of the SCI asset allocation models.
Every 2nd Tuesday of the month @ 12pm CDT
Join from PC, Mac, Linux, iOS or Android:
Click here for Conference Login
Meeting ID: 325 159 0655
Dial In Audio: 669-900-6833
LaSalle St. Investment Advisors, LLC
940 N. Industrial Dr.
Elmhurst, IL 60126
Copyright © 2017 LaSalle St. Investment Advisors, LLC., All rights reserved.
As you consider the information provided with the Salt Creek Investors Asset Allocation Platform (the “Program”), please review the following:
The information and descriptions provided about the Program are for educational and information purposes only and should not be used or construed as investment advice, an offer to sell, a solicitation of an offer to buy, a recommendation for any security, or suggest any course of action. LaSalle St. Investment Advisers (“LSIA”) does not guarantee that the information or descriptions supplied about the Program are complete or timely. LSIA makes no warranty with regard to any results obtained from the Program or its deployment. LSIA is not responsible for any direct or incidental loss incurred by relying on information provided about the Program. The allocations presented herein are illustrations and completely hypothetical. None reflect actual investments or investment results and do not reflect allocation of any individual portfolio. Asset allocation and its results vary over time. Other allocations or asset investment categories not offered in the Program may have characteristics similar or superior to those illustrated. Past performance of any model or allocation is no prediction of future results. Neither the Program nor any system/model can predict the future of any market or price movement in a market. Diversification and asset allocation do not guarantee against the risk of investment loss, including risk of loss of principal. Information provided regarding the Program is as of the date of publication and may change at any time without notice. Information has been included which was obtained from third parties and is believed to be reliable and complete. LSIA does not warrant the accuracy or completeness of such information. LSIA is a registered investment advisor and does not provide tax, accounting or legal advice ‒ the information and/or descriptions provided do not constitute such advice. More information regarding LSIA and its investment strategies can be found in the LSIA brochure, ADV Part II, which is available online or through LSIA. Asset allocation may not be suitable for all investors. Before deciding to invest, potential participants should consult with an investment adviser to determine an appropriate investment strategy and methodology which meets the investor’s specific financial needs, objectives, goals, time horizons and risk tolerance. The information and description provided herein has been made without consideration of any investor’s particular suitability for investing in the Program. Asset allocation also involves investment in various asset classes which are not insured by the government. Investing in fixed income and/or high yield securities involves additional concerns including interest rate risk, credit risk and reinvestment rate risk. Investing in securities outside the United States may entail greater risk than investing in domestic U. S. markets. These risks typically include political and economic uncertainty of foreign countries as well as currency exchange fluctuations, including foreign currency exchange rates, political risks, different methods of accounting, financial reporting and foreign taxes. The prospectus accompanying a security should carefully be reviewed before investing. The services described herein are available to persons residing in any state where they would otherwise be contrary to local law or regulation.