Client Acquisition and Maintenance Process.

At Piedmont Capital, most of our business is referral. Our process is powerful in its simplicity.






Our Philosophy
Our Philosophy is equally simple; we subscribe to the principle of Asset Allocation, or in the vernacular, "don't put all your eggs in one basket."

Asset Allocation Explained: The Efficient Frontier
Piedmont Capital utilizes disciplined asset allocation models to assist our Clients in identifying the most efficient blend of investments. We define this strategy as the combination of asset classes that offers the highest reward potential for the level of risk one is willing to accept. Our approach is designed to bring new clarity and simplicity to the pursuit of our Client's financial goals. We continually monitor and update Client portfolios in response to changes in life goals and market conditions.




The Efficient Frontier

One of the greatest challenges facing any investor is determining the best blend of assets for their portfolio - a blend that is intended to achieve the investment objectives of the portfolio while still exposing the investor to a level of risk he or she can tolerate. We believe this blend of assets (or diversification) - the division of a portfolio between stocks, bonds, cash, and their subclasses - is the most important component of portfolio planning.

The good news is that not all investments move up or down together.  Thus, it is possible for losses in one asset to be offset by gains in another. In 1990, Harry Markowitz, Merton Miller, and William Sharpe shared a Nobel Prize for their work in Modern Portfolio Theory (MPT). The theory sets forth a way for investment managers to develop efficient portfolios:  those that provide the highest available expected return for a specified level of risk, or the lowest available risk for a specified level of return. The optimal portfolio depends on the preferred balance between risk and return. These "optimal portfolios," when plotted in a single line upon a risk/return graph, are called the "efficient frontier."


 

How Diversification Can Help Reduce Portfolio Volatility
We believe proper diversification lies at the heart of successful investing, and the power of diversification springs from a subtler concept: correlation. Simply put, correlation is the degree to which different markets move together. As the recent history of worldwide financial markets illustrates, markets do not move in lockstep. Understanding how markets correlate allows an investor to combine investments that may increase return - while potentially decreasing risk.



*This chart illustrates two hypothetical investments in different markets, which fluctuate in opposition; when Investment A is up, Investment B is down. The investor owning both receives less volatile results.  This chart is merely for the demonstration of theory and is not meant to predict a particular investment's performance.

Portfolio Performance Monitoring
All of the efforts of a sound investment process are meaningless if clients are provided with inadequate records and poor communication of results. Our customized quarterly performance monitoring includes all of the information necessary for us to fulfill our responsibilities as well as to provide fiduciaries with a report that is presented in a logical and concise format.

 

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