Investment Philosophy


The investment advice and services provided by Monterey Bay Asset Management to its clients vary, depending on each client’s needs, objectives and circumstances. Factors affecting the tailoring of client portfolios include client investment horizon, risk tolerance, tax sensitivity, estate or trust issues, concentrated stock positions, and other constraints. Our services typically include the design and implementation of a custom asset allocation, portfolio monitoring, regular reporting, performance analysis and periodic rebalancing. Investment management is provided on a discretionary basis, however all trades will be discussed with clients in advance before they are placed, unless the client requests otherwise.


Monterey Bay Asset Management incorporates Modern Portfolio Theory as the foundation of its asset class based investment approach. The primary objective of this approach is to maximize portfolio returns for any given level of risk. We believe that asset allocation drives total portfolio return, while market timing and security selection account for only a small portion of the variance of total returns. Additionally, academic research has shown that diversified portfolios show a tendency towards reduced volatility and have an increased potential for higher investment returns. We believe investment portfolios should include representation from a multitude of asset classes, including domestic and foreign equity positions (small-, mid- and large-cap); fixed income investments (corporate, government, agency, etc.); real estate, precious metals and commodity market exposure; and cash or cash equivalents.


From time to time, Monterey Bay Asset Management will rebalance client portfolios to ensure they remain consistent with clients’ long-term asset allocation targets.