Max W. Smith, a local registered investment adviser and president of the Center for Investment Management, said his firm has acquired a highly sophisticated computer software system that provides its clients with state-of-the-art portfolio management.
The system is based on the Modern Portfolio Theory, designed by Harry Markowitz and William F. Sharpe. In 1990 the Nobel prize for economics was awarded for work in this area.Smith said Modern Portfolio Theory provides a substantial base of research from which they can utilize statistical and mathematical tools for quantifying risk and reward in investment portfolios.
"What this really means to the investor," Smith said, "is that portfolio allocation can be more precisely designed for the individual's risk tolerances and needs for return."
Typical investing has been a reactive process, where investors react emotionally to market trends or the latest financial headlines. This approach to investment management, Smith said, can cause sleepless nights, uncertainty and anxiety for the investor.
"It is because of these emotions and the typical reactive approach to investment management that so many investors are dissatisfied with their results over time," Smith said.
"This all sounds a little technical, and the underlying theory may be," Smith said. "However, the bottom line is that managing investment portfolios is a little more precise than it has been in the past."
Those interested in this method of portfolio management may call Smith at 375-0466.