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Investment Philosophy

The investment philosophy of Exchange Capital Management is rooted in two of the basic tenants of long-term investment success: strategic asset allocation and diversification. This strategy is expressed through a written Investment Policy Statement (IPS) which becomes the blueprint for the fulfillment of our fiduciary duty over the assets entrusted to our care.

Asset allocation, or the portion of an account invested in riskier assets (e.g. stocks) versus less risky assets (e.g. bonds), is determined by a financial plan tailored to the specific needs and circumstances of each client. As we are allocated to stocks and bonds per an objective financial plan, and not a short-term guess of what the markets are going to do, each asset class can be invested properly to do their part.

The bond section of the portfolio is intended to be the ballast that protects when the stock market enters more difficult times. As such, undue risk should not be taken there. This frees the stock section of the portfolio to be brave and long-term in nature. Throughout all parts of the portfolio, diversification is ubiquitous. Individual security and sub-asset class weights are monitored and adjusted.

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