The model portfolio process begins with choosing broad asset classes, including domestic and foreign stocks and bonds.  The percentage targets for each class are chosen such that the overall risk and return potential are in the desired range.  The fund managers are chosen based on our extensive investment company research, and are designed to match the overall target allocations.

Landaas & Company believes that risk and liquidity are, in large part, a function of asset class mix.  By reviewing the long-term performance of various asset classes it is possible to focus on balancing the risks and rewards of market behavior.  Based on your time horizon, risk tolerance, performance expectation and asset class preferences, an efficient or optimal portfolio is identified.  A typical asset allocation varies, but usually remains around a balanced portfolio of 50% stocks and 50% bonds and cash.  The portfolio seeks maximum return consistent with a low probability of a loss greater than 10% over any 12 months period and will attempt to achieve above-average yield with below average volatility.  The portfolio is well suited for investors uncomfortable with an aggressive strategy who nevertheless want to pursue growth over the long term. However, past performance does not guarantee future results.

The equity portion of the portfolio will be comprised of large, mid and small-cap stocks representing the value, blend and growth styles.  The stocks are typically held inside mutual funds, overseen by proven investment managers screened and selected by our research.  The equities will also include international stocks in mature markets along with a small percentage in emerging markets.  The fixed income portfolio can be comprised of cash, treasury notes, municipal bonds, corporate bonds and a small percentage in high-yield corporate bonds.  Again, many of the fixed income securities are held inside mutual funds.  We will construct the fixed income side of the portfolio using money market funds, short and intermediate-term bond funds and high-yield funds.  We will typically target maturities of three to seven years while still being cognizant of unusual opportunities that may be offered at other maturities and durations on the yield curve.  In some cases, the use of individual bonds may be a more cost-effective method of providing the fixed income component and will be used when appropriate.