Ultra Modern Portfolio Theory® -
Aurum Advisory Services

We believe the highest likelihood of achieving your stated investment objectives starts with optimal asset allocation frameworks. Modern Portfolio Theory (MPT), developed in the 1950’s by Nobel winner Harry Markowitz, is the basis of traditional asset allocation portfolios. MPT assumes that given a portfolio of assets’ expected risk, return and correlation, most people prefer owning the least risky portfolio for a given return level.

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One of the failings to investor portfolios is the implementation of MPT. Traditional portfolios based on MPT invest in basic asset classes, such as equities, fixed income and cash, but as a consequence, rely heavily on equity price appreciation to generate returns. The bias toward equities results in inefficient portfolio allocations for investors looking to manage downside risk as the investment time horizon compresses with age.

Our approach to high net worth clients is to focus on consistent performance and downside protection through the application of Ultra Modern Portfolio Theory. Ultra Modern Portfolio Theory incorporates traditional asset classes across equities, fixed income and cash, along with alternative investments, to achieve not just diversification of assets, but also diversification of risks. By focusing on diversifying both the assets and the risks, we deliver less volatile portfolios with a higher probability of success of achieving your intended objectives.

 At the heart of our investment philosophy are the Aurum Asset Allocation Frameworks. These encompass five strategic asset allocation frameworks based upon Ultra Modern Portfolio Theory. The goal of our frameworks is to provide varying degrees of risks and achieve what Sir John Templeton said all investment programs should strive for, “maximize real return after tax.” 

The Aurum Asset Allocation Frameworks are not static over time, nor is the use of market timing necessary to manage risk. In contrast, we allow price to tell us the implied valuation and observe price momentum of a variety of asset classes. This, along with market research covering equities, credit, commodities, currencies, rates and more from independent research firms and investment managers, help formulate our views on each asset class.

 In addition, we observe the cyclical and secular cycles acting on the domestic and global economy. Analyzing the macro-economic backdrop allows you to benefit from the growth around the world or to become defensive when expectations look overly optimistic. The result is the ability to profit from the inherent behavioral biases that plague investors.

Contact Aurum Advisory Services
To receive a copy of Aurum Asset Allocation Frameworks or to learn more about our wealth management services, contact Eric Wulff or Chris Bart at 440.605.1900 or visit our contact page.

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