This chart demonstrates what makes Granite DIFFERENT
Are you properly prepared for the next market meltdown ?
(See below for the details)
The Cornerstone Strategy Difference
Common investment products offered by many professional investment advisors are generally a standard mix of stocks, bonds and/or mutual funds. For example, many advisors guide their clients to invest in a mix of 60% stocks and 40% bonds. This is a “typical” approach often offered as a diversified means of investing (and used by many large institutions and pension funds).
Sometimes, clients may be offered a “tiered” approach to that same stock/bond mixture depending on their age. For example, younger clients may be advised towards a larger allocation of stocks than bonds (like a 75% stock/25% bond mix) while older clients may be guided towards a larger allocation of bonds (like a 25% stock/75% bond mix).
These models offer reasonable diversification and can be a great tool for new investors to use. The issue is that many investment advisors will place clients in these funds and other than an occasional tweak, clients can be left in these funds for decades before any genuine re-allocating gets applied.
Another, even bigger, issue is that even though this method technically provides some degree of diversification, during times of extreme market turbulence the drawdowns associated with these models can be huge (drawdowns refer to the time and depth the portfolio experienced a decline in value from its most recent high value mark).
These large drawdowns can often result in investors deviating from the long term plan and pulling funds out of the market at the worst possible time.
At Granite, we do things differently. Our investment approach is to employ advanced trading strategies generally only offered to high net worth individuals or institutions.
Granite’s Cornerstone Strategy is an actively managed growth and income strategy that employs Tactical & Strategic Asset Allocation Methods to invest in broad asset classes like stock indices, bond indices and ETFs.
Unlike the traditional buy & hold portfolio offered by most investment advisors, Granite embraces financial science to continually re-evaluate market conditions and make portfolio allocation adjustments on a monthly basis. This allows us to capture major market trends while dramatically reducing downside market exposure.
For example, instead of maintaining a consistent 60% stock/40% bond portfolio ratio as many advisors recommend, Granite will adjust that ratio on a monthly (and sometimes bi-weekly) basis. So if we are in a bearish/down-trending market, we may adjust the allocations to be 10% stock and 90% bonds (essentially taking most of the downside risk assets off the table). Alternatively, if the market is in a general uptrend, the allocation may be adjusted to 80% stocks and 20% bonds (capturing the upside potential of the market while monitoring for any signs of weakness ahead).
To be clear, Granite is not necessarily trading different assets than the typical investment advisor is trading (e.g. we're still investing in very common, highly liquid ETFs, bonds and broad-based indexes), we are simply tweaking the asset allocations more frequently. This allows us to effectively capture the market trends while ignoring the daily market “noise” and dramatically reduce downside risk exposure.
We accomplish this re-allocation approach by studying, tracking and then implementing some of the industry’s best known and proven tactical asset allocation strategies. This investment style isn’t something that Granite “invented”, rather, it is a tried and true investment concept that is used by many top investment managers around the world today.
The end result is that we are generally able to capture/mimic the upside performance of the broader equities market while substantially reducing the downside risk associated with the typical buy & hold portfolio offered by the average money manager.
The two charts below are meant to demonstrate the Cornerstone's resilience during two recent turbulent market events.
The 2000 Dot-Com market crash and the 2008 Global Financial Crisis Market meltdown.
Granite's hypothetical performance above includes all fees and expenses.
For complete, up-to-date Cornerstone Strategy performance information, Please click here.