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The asset allocation model is the centerpiece of Hays Advisory's management philosophy. This model has been developed and implemented over the course of the last thirty years and is based on the following factors:
- Positive bias or historical upward trend of the stock market
- Investor psychology
- Monetary conditions
- Financial market valuations
Each prong is based upon time tested indicators that we monitor on a continual basis. The three variable legs; Valuation, Monetary, and Psychology are based upon specific indicators that historically have proven to be very accurate in predicting future market trends. We closely follow these indicators to prevent emotions from entering into our analysis of the current market. Individual indicators may be viewed in the Charts section of the website which is updated daily.
Our allocation model determines the percentage of assets that are appropriate to invest in equities, bonds and cash for several different types of investors at any given time. Hays Advisory's model provides the ability to raise cash when the market is overvalued and vulnerable, and to fully invest when equities are undervalued and conditions are positive.
The firm recommends portfolio weightings for three different types of strategic investors: long-term growth investors, moderate growth investors and conservative growth investors. These models allow clients to invest to the level of risk that fits their long-term goals and personality. The more conservative an investor is, the lower the percentage of their portfolio should be allocated to the more volatile equity asset class. For instance, a conservative growth investor could have as much as 65% in equities and as little as 20% depending upon the market risk at any given time, while a long-term growth investor can have as high as 100% in equities, with a minimum of 55% when the market risk rises.
By using our asset allocation model, subscribers are able to better find an asset allocation weighting of stocks, bonds and cash. Asset allocation is the first and most important part of Hays Advisory's discipline.
