The Balanced Portfolio combines the same
investment disciplines employed by our large capitalization equity and
fixed income strategies, with an asset allocation customized
to our clients' investment objectives.
RNC Genter Balanced accounts have
two portfolio managers, one for equity and one for fixed income. The philosophy
and process for the equity component of a balanced portfolio are the same as
discussed in the Equity section & Fixed Income (Taxable
& Municipal) sections.
the asset allocation in Balanced portfolios is an ongoing process and is
determined by RNC Genter's Investment Policy Committee. The process begins by
considering such factors as GDP, short and long-term interest rates, corporate
profits and inflation. We then seek to determine the probable direction of the
economy and the likely returns to stock and bond markets.
An asset allocation change of 5% in a
balanced portfolio would be considered a measured move occurring under
circumstances where we believe there is a clear risk vs. return advantage of one
asset class over another. An asset allocation change of 10% or more would result
from more extreme conditions existing in the economy, which in turn we believe
would impact the financial markets.
A more definitive change in asset
allocation would occur when the RNC investment professionals agree as a group
that an inflection point has been reached that we believe clearly identifies a
change in the overall direction of the economy, e.g. a transition from an
expanding economy to a recession.