Visit

4 Pike Street NW

Rome, GA 30165

Call

T: 706.622.3226
 

Contact

sherman@sjfim.com

The LPL Financial representative associated with this website may discuss and/or transact securities business only with residents of the following states: IL, NY, FL, GA.

Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Level Four Advisory Services, LLC, a registered investment adviser. Level Four Advisory Services, LLC and SJF Investment Management are separate entities from LPL Financial.

 

LPL FINANCIAL PRIVACY/SECURITY

SJF Investment Management investment philosophy is best described as research driven portfolio design with a core and satellite investing approach.  We leverage LPL Financials leading research, as well as third party research for analysis and due diligence.  Starting with the clients’ unique objectives and concerns in mind, we work to create a customized portfolio incorporating both, the Core Portfolio (Strategic Asset Allocation) as well as the Satellite Portfolio (Tactical Asset Allocation).

 

To understand this strategy, visualize the wheel of a bicycle:

Core (Strategic Asset Allocation)

The hub of the wheel represents your core portfolio (Strategic Asset Allocation). This is the largest part of your portfolio and is composed of mostly of diversified US large cap stocks and US bonds.

Core portfolios or “the hub of the wheel” can come in many shapes and sizes depending on the needs, timeframe and personality of the client, but as the name implies, core investments are the building blocks and in many cases suffice as an appropriate portfolio. Typical core investments might be a portfolio of large cap stocks, bonds (taxable or tax free), and Exchange Traded Funds (ETFs). The core investments would be held for longer time periods and rebalancing of the allocation takes place once a year. They may make up anywhere from 70-90% of the overall allocation depending of the client's experience, sophistication, risk tolerance, time frame, and objective.

Within this strategy, for more conservative portfolios and clients taking regular distributions we implement a profit-taking strategy. Our objective is to be proactive and understand our clients short term and long term liquidity needs in advance by creating a cash position before it is absolutely necessary.

Satellite (Tactical Asset Allocation)

The individual spokes of the wheel, represent your satellite portfolio Satellite Portfolio (Tactical Asset Allocation). Based on our current research and market trends, this has a narrower focus on a particular theme, sector, region or opportunity.

Satellite portfolios or “the spokes of the wheel” are typically the more targeted part of the portfolio and are designed with two goals: (1) reduce market correlation; and (2) provide additional returns (or alpha) above the market returns of the Core portfolio. Separately, Satellite investments typically carry higher risk; however, they can moderate volatility when added to a core portfolio.

This allocation should work best in market environments that offer consistent identifiable trends. However, during times of a flat trendless market, a tactical tilt may bring little to no benefit. Satellite portfolios tend to have a narrower focus on a particular theme, sector, region or opportunity, for example healthcare, technology, energy or ever exposure to gold or oil.

Generally speaking, they would have shorter expected holding periods than the core holdings

 

The core and satellite investment approach is meant to minimize risk and maximize return through asset allocation and diversification. Portfolios typically contain between 30 to 35 positions to further diminish individual security risk. 

Investments mentioned have various risks including loss of principal and may not be suitable for every investor. No strategy assures success or protects against loss. Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction cost. Investors should consider the tax consequences of moving positions more frequently. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.