MRI Analysis of Your Portfolio

THE PURPOSE OF PORTFOLIO MRI®

 

The portfolio MRI is a diagnostic measure of your current investment information. The purpose of this personalized Portfolio MRI®, is to help you understand how various mixes of styles of investment portfolios may have performed in the past.

There are three components of the Portfolio MRI®

  1. The analysis begins with a discussion of the historical returns of basic asset categories or markets and compares them to every investment’s long-term enemy-inflation.
  2. Further, the MRI® attempts to estimate, via broad based assets category selection, the current mix of your portfolio, and simulate the mix’s historical risk and reward characteristics.
  3. Finally, the Portfolio MRI® allows you to compare the risk versus reward characteristics of your portfolio, against those of broadly diversified sample asset mixes, weighted toward small cap investing, international fixed income and equities, and high book-to-market value securities.

In both the analysis of your current portfolio and the mixed labeled asset allocation portfolios, indices have been used to demonstrate the historical performance of the various asset classes chosen. Studies by Brinson, Hood and Beebower* demonstrate that 91.5% of a portfolio’s performance is determined by its asset allocation policy. To this end, the goal of free market investing is to provide broadly diversified portfolios that deliver market returns with reduced risk.

*Source: “Determinants of Portfolio Performances,” Financial Analysis Journal, Gary P Brinson, L. Randolf Hood, and Gilbert L. Beebower, 1986, 1990, 1991. (referred to throughout as Brinson, Hood & Beebower)