Heritage Capital’s Balanced Investment Strategies

Portfolios with a Balanced objective are characterized as having dual goals. Balanced portfolios typically exhibit moderate growth of capital while simultaneously dampening volatility. Many holders of Balanced portfolios will have an intermediate time horizon of 5 to 10 years. They are willing to forego significant return potential in order to achieve more predictable income and total returns on investment.

Short-Term Gold Equities Program

Heritage Capital’s Short-Term Gold Equities Program is a concentrated, risk managed sector program designed to participate in the short and intermediate-term rallies in the PHLX Gold/Silver Index (XAU) using the Gold Miners ETF, Rydex Precious Metals Fund and similar gold related instruments. When short and intermediate-term price declines occur, our objective is to position client assets in the safety of money market funds. Capital preservation and appreciation have similar weights in this actively managed strategy, but volatility and drawdowns are significantly below historical levels through the use of tight and stringent stop losses on all positions.

This program is non-correlated to the U.S. stock market. Through its focus on short and intermediate-term moves, it has the potential to produce gains regardless of the longer-term market direction for precious metals mining companies.

Best of Bonds Program

Heritage Capital’s Best of Bonds Program employs short-term and intermediate-term momentum models to indicate which fixed income sector has the better likelihood of rising between high yield bonds (risk on) and treasury bonds (risk off). It then buys and sells appropriate high yield and long-term Treasury bond exchange traded funds. When neither sector offers a positive risk/reward ratio, the portfolio will be invested in short-term cash equivalents.

Our goal is to participate in the bond market sector that offers the best risk/reward ratio with lower risk and less exposure to interest rates. Stop loss protection is a key element of this strategy to keep drawdowns on the moderate side. The Best of Bonds Program offers capital appreciation, capital preservation and dividends without the typical bond risk from rising interest rates.

Strategic Active Asset Allocation Program

Heritage Capital’s Strategic Active Asset Allocation Program first begins with a periodically updated allocation between equities and fixed income. From there actively managed exchange traded funds and mutual funds that have internal capital protection strategies are chosen from a small pool. The Strategic Active Asset Allocation Program offers capital appreciation and dividends and seeks to keep drawdowns well below the popular indices.

Global Active Asset Allocation Program

Heritage Capital’s Global Active Asset Allocation is based on the time-tested and highly successful Yale endowment model. This top down, actively managed, quantitative strategy offers diversified exposure to the global financial system across multiple asset classes. Using index based mutual funds and exchange traded funds (ETFs), the world is broken down into U.S. equities, international equities, fixed income, commodities, currencies and real estate for weekly portfolio rebalances.

This long only strategy seeks to offer competitive returns to the traditional 60/40 equities to fixed income blend with lower volatility and drawdowns from the use of non emotional, diligently researched, multi factor alpha signals and strict position limits. With low correlation to the U.S. stock market, capital preservation outweighs appreciation and dividend income is also a benefit.

Dividend Income & Growth Program

Heritage Capital’s Dividend Income & Growth Program begins with a 60% core holding in lower volatility dividend paying exchange traded funds (ETFs), usually in equities. As stock market conditions dictate, additional dividend paying ETFs may be added that hold equities, convertible bonds, preferred stocks, master limited partnerships (MLPs) and other dividend paying securities.

When the stock market climate indicates higher than normal risk, the core holdings can be hedged with ETFs and mutual funds that profit when a given index declines. Additionally, in extreme cases of risk, the hedge may be in the form of leveraged, inverse ETFs and mutual funds, which profit when a given index declines and sets the portfolio to have negative exposure to the stock market (short position).

The Dividend Income & Growth Program offers capital appreciation, a steady stream of dividend income with less of a focus on capital preservation.

Past performance is not indicative of future returns. All investment approaches have the potential for loss as well as gain.