A bi-weekly publication from Consultiva Internacional, Inc. (Registered Investment Adviser)
Many thanks to the more than 175 clients, collaborators and guests who joined us for this year’s Pursuit of 8% conference. We were glad to see many friendly faces, to share exciting news about our firm, and present our perspectives on the global economy, capital markets and Puerto Rico. This year will mark a turning point for our firm as we roll out new research, reporting and client service functions that will greatly enhance our client’s experience. We also seek to lay the ground work for our expansion into the Caribbean Basin, Latin America and Europe. Our clients will soon have access to custody and clearing services that are exclusive to clients of Registered Investment Advisors, through The Bank of New York Mellon and Pershing Advisor Solutions. BNY Mellon is a global investments company, dedicated to helping clients manage and service their financial assets throughout the investment lifecycle. Pershing, is a long-standing company and subsidiary of BNY Mellon Corp., which is a recognized provider of clearing and custody solutions in the industry. Through its exclusive Pershing Independent Advisor Platform, our clients may access custody and clearing services, without the need for a brokerage conduit. They will also have increased portfolio analysis and reporting capabilities through our new investment management platform – Addepar. Addepar delivers automated data aggregation, robust portfolio analysis, and flexible reporting, on demand. Our advisers and our clients will have electronic access to on-demand reporting, speeding up and deepening portfolio analytics. These innovations will allow our firm to power our current research and reporting protocols on our clients’ behalf. They will also broaden our capacity for addressing the growing demand for our services, without sacrificing attention to individual needs. We truly believe that our firm’s growth, in and beyond our national boundaries, can be a relevant contributor to developing Puerto Rico’s potential as a financial services hub in the region and beyond. You can rest assured that we will continue to work hard for our clients and for Puerto Rico.
by Myrna Rivera, CIMA®
Founder & Chief Executive Officer
The Advisor’s Corner
This year’s Pursuit of 8% panels and presentations showed us how important it is to maintain a well-diversified portfolio. A 2005 study published in the Journal of Wealth Management entitled “Strategic Asset Allocation and Other Determinants of Portfolio Returns” shows that on average, strategic asset allocation explained 77.5% of the variability of the portfolio returns examined. Asset allocation is thus a key driver of portfolio return variability, but what are the other determinants? The investment process should not be limited to strategic asset allocation. Managers can also add value through tactical asset allocation and security selection. While the contributions of security selection and tactical asset allocation may seem small compared to strategic asset allocation, the power of compounding returns makes them significant to individual investors. Therefore, meeting periodically with your advisor can help you take advantage of optimal management in the short-term, and help you remain focused on long-term investment goals. Active managers are usually in a better position to take advantage of temporal opportunities that arise in volatile markets as they may not be concentrated in any one sector, country or category. Some are also able to incorporate hedging and non-correlated strategies into portfolios to increase risk mitigation through diversification.
by David L. Álvarez
Senior Investment Adviser
Consultiva is a Registered Investment Adviser. The registration with the Securities and Exchange Commission does not imply a certain level of skill or training. Consultiva has compiled the information for this report from sources Consultiva believes to be reliable. Sources include: investment manager(s); mutual fund(s); exchange traded fund(s); third party data vendors and other outside sources. Consultiva assumes no responsibility for the accuracy, reliability, completeness or timeliness of the information provided, or methodologies employed, by any information providers external to Consultiva. Conclusions reflect the judgement of Consultiva Investment Strategy Committee at this time and is subject to change without prior notice. There also can be no guarantee that using this information will lead to any particular result. Past performance results are not necessarily indicative of future performance. Diversification does not guarantee a profit or protection against loss. This document is for informational purposes only and is not intended to be an offer, solicitation, recommendation with respect to the purchase or sale of any financial investment/ security or a recommendation of the services supplied by any money management organization neither an investment advice or legal opinion. Investment advice can be provided only after the delivery of Consultiva’s Brochure and Brochure Supplement (ADV Part 2A and 2B) once a properly executed investment advisory agreement has been entered into by a client and Consultiva. This is not a solicitation to become a client of Consultiva. There are risks involved with investing including the possible loss of principal. All investments are subject to risk. Investors should make investment decisions based on their specific investment objectives, risk tolerance and financial circumstances. Global and international investments may carry additional risks that are generally not associated with U.S. investments, such as currency fluctuations, political instability, economic conditions and varying accounting standards. Annual, cumulative, and annualized total returns are calculated assuming reinvestment of dividends and income plus capital appreciation.