Developing your investment strategy

While markets and economic conditions change, a well-designed investment strategy can keep you moving forward toward the future you want. In working with you to build your wealth portfolio, we focus on a diversified asset allocation that helps to provide growth and stability while addressing volatility and risk.

Risk increases and decreases over time, but it never disappears. Depending on your risk tolerance, timeframe and goals, we’ll design a diversification strategy that likely will include a mix of equities, bonds and real assets. We focus on asset classes and investments with the potential to outperform relative to risk.

Asset Allocation

Asset allocation research

Our research starts with an economic assessment that considers sources of volatility such as interest rates, corporate earnings and global trade. Our investment team studies:

  • Long-term trends such as demographics and productivity.

  • Cyclical trends including a reading of business and credit cycles.

  • Short-term trends like monetary policy and projected growth in corporate profits.

  • Private market and illiquid strategies that may provide portfolio diversification opportunities.

  • Impact investing performance including environmental, social and governance (ESG) activities – to design a portfolio that reflects your values as well as your wealth goals. 

Portfolio diversification

Putting your needs and priorities first, we research asset classes to help ensure you have the appropriate asset allocation mix. We’ll create a plan that pursues returns at your preferred level of risk.

Equities

Our asset allocation approach retains a bias in favor of U.S. equities. We believe higher accounting standards, shareholder friendliness, corporate governance and rule-of-law generally favor domestic companies over international firms. Since many U.S. companies are multinational, investing in domestic firms still provides access to overseas markets.

 

Bonds

Bonds can provide current income, diversification against the risk of equities and protection against deflation. In nontaxable accounts, owning domestic-focused fixed income bonds can provide a meaningful correlation benefit to risk assets. In both nontaxable and taxable accounts, exposure to high-yield bonds creates opportunities for current income and expected returns that exceed those of traditional bonds.

Real assets

Real assets can help to insulate investors from inflationary risks. Inflation-protected sectors include real estate and subsectors of the equity market, such as energy and energy logistics companies. Infrastructure, metals, farmland and timber are other portfolio instruments that can work to counteract inflation’s corrosive effects.


 

How we select investments

With your appropriate asset allocation in mind, we’ll select investment options that we believe support your goals and may offer the greatest potential for returns. We draw from the full range of investment categories available in today’s marketplace, following a rigorous review process.

Insights from our experts

Market news

Read our up-to-date reports on economic events and news from the markets.

How diversification in investing may reduce risk

Why is diversification important in investing? Because risk never disappears – even in times of economic growth.

5 types of bonds to invest in for diversification

Looking to diversify your investment portfolio without increasing instability? Consider these bonds with a lower-risk profile.

Disclosures
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Investment and insurance products and services including annuities are:
Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency.

U.S. Wealth Management – U.S. Bank is a marketing logo for U.S. Bank.

 

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U.S. Bank and its representatives do not provide tax or legal advice. Your tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

The information provided represents the opinion of U.S. Bank and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

U.S. Bank does not offer insurance products but may refer you to an affiliated or third party insurance provider.

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Diversification and asset allocation do not guarantee returns or protect against losses.

Equity securities are subject to stock market fluctuations that occur in response to economic and business developments.

Investments in fixed income securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Investment in fixed income securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term securities. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities.

Investments in high yield bonds offer the potential for high current income and attractive total return, but involve certain risks. Changes in economic conditions or other circumstances may adversely affect a bond issuer’s ability to make principal and interest payments.

There are special risks associated with investments in real assets such as commodities and real estate securities. For commodities, risks may include market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors. Investments in real estate securities can be subject to fluctuations in the value of the underlying properties, the effect of economic conditions on real estate values, changes in interest rates and risks related to renting properties (such as rental defaults).