Wealth Management

Given today’s volatile markets, we recommend that high net worth investors adopt a proactive approach.  We recommend an Institutional Asset Allocation strategy that we refer to as the “Smart Money” approach to portfolio management.

It’s called “Smart Money” because it references the success major institutional investors have achieved due to their understanding, access, and commitment to real diversification across multiple asset classes.  In our “Smart Money” approach to investing, the “core” asset management still serves as a foundation for the portfolios.  To anchor capital market exposure, your Cedar Brook advisors recommend combining core strategies of buy and hold stock selection with a tactical portfolio approach, as well as a tax-efficient layer.   In addition, the following components round out the “Smart Money” allocation approach:

Real Estate – There are several ways to access real estate from an investment perspective.  This spectrum ranges from personal use assets such as home and property, to publicly traded REIT stocks, to syndicate “deals”, to institutional private placements.  Given the pricing, valuation, and risk inherent in a very mature domestic real estate market, the non-traded or private category is the recommended manner to gain real estate exposure.  To that end, Cedar Brook advisors recommend a strategic portfolio of specialist managers – each with a track record of protecting principal, raising dividends, building solid real estate operating companies, and ultimately seeking to deliver capital appreciation through liquidity events.

Hard Assets, including commodities and managed futures – Just as fund managers trade stocks and bonds to deliver performance from the retail markets, commodities and futures managers trade in a wide variety of global marketplaces to deliver non-correlated investment returns.  We identify managers with whom we’ve worked with expertise navigating the global markets and trading in opportunistic areas including interest rates, energy, metals, currencies, agriculture, and indices.  The portfolio can perform in both up and down markets and has virtually no historical correlation to the broader stock and bond markets.  In addition, we believe in scrutinizing the secular global demand for these assets by the growing economies of China, India, and Brazil.  Rather than speculate in these volatile stock markets, we recommend participating by “buying what they’re buying”.

Hedge Funds – Wealthy investors have been able to retain capital during down markets for years through complex instruments such as derivates, equity collars, arbitrage trading, and other hedging strategies.  We recommend a more fundamental approach to hedge funds – a diversified fund of funds strategy designed to provide equity returns with less volatility. 

Private Equity – Half of all equity companies in the United States are private entities.  Equally compelling is private equity managers have historically outperformed all major market indices, as they have the ability to directly impact portfolio growth in their companies and manage risk.  We recommend a deal-by-deal or fund selection approach to manage risk and gain tactical access to complementary private equity strategies.

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