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Patton's Mission: to dramatically improve the financial lives of every investor we encounter.



Our Portfolios

Simply a better portfolio

Super-Diversification is our proprietary investment strategy providing a solution for your total portfolio. It’s designed and proven to deliver better returns than a more traditional investment strategy of stocks and bonds for any risk portfolio.

Most investors own both stocks and bonds because it provides diversification. There are additional investments that offer much more diversification that are often ignored by most investors and many advisors. It’s these additional investments that are incorporated in our Super-Diversified Portfolios that make them better.

A total portfolio solution

Super-Diversification is an investment strategy for your total portfolio. We custom design a portfolio using our Super-Diversification strategy where all parts of the portfolio are designed to work together. A portfolio typically consists of ten or more funds that then represent 1000’s of securities plus a possible allocation to our proprietary hedging stratey. This offers you the luxury of having all your liquid investments consolidated in one place knowing that your entire portfolio has been strategically designed so that it is working for you.

Super-Diversification is a portfolio…not a product.

Investment Product

a product, such as single mutual fund, is generally designed to meet a narrow and very specific investment need or goal.

Investment Portfolio

a portfolio, such as a Super-Diversified portfolio, is a combination of multiple funds and securities in specific proportions (allocations) designed to deliver the appropriate risk profile for you.


Math that works

Correlation, a relatively simple mathematical statistic, explains a great deal about diversification. Correlation simply measures the performance of two things and determines how closely they move together.

Diversification is about having multiple investments in a portfolio that do not always move up down together. Our Super-Diversified Portfolios simply own more investments that deliver the benefits of diversification.

Correlation is the key to a diversified portfolio
Correlation measures how closely investments move up and down together
Highly correlated investments move up and down together very much the same way and at the same time. Such investments provide little diversification
Low correlated investments do NOT always move up and down together. These investments can provide great diversification.
Super-Diversified Portfolios consist of several low correlated investments to deliver great diversification. We make this math work for you!

Utilizing low cost index funds

The only funds used in your Super-Diversified Portfolio are low cost index funds. Exhaustive academic and industry research has shown that the math around this is simple…lower cost funds deliver higher returns. Lower cost is just one of the benefits of the index funds used in your Super-Diversified portfolio.

Other benefits include:

Diversification

index funds tend to be diversified among 2-3 times the number of holdings in competing funds.

No style drift

an index fund stays true to its target asset class

No overlapping holdings

many investors own multiple funds that then have overlapping holdings (multiple funds that own the same securities). Each index fund represents a distinct asset class and eliminates overlapping holdings resulting in a more efficient portfolio.

Access to a very wide range of investment types

there are different funds for nearly every asset class (U.S. stocks, international stocks, real estate, commodities, gold, bonds, and more).

Flex hedging strategy

In addition to a variety of low cost index funds in each Super-Diversified portfolio, many Super-Diversified portfolios also have an allocation to our proprietary Flex hedging strategy for additional diversification. This Flex Strategy consists entirely of U.S. stocks and has proven to provide substantial diversification value in a portfolio resulting in both better overall portfolio returns and comparable or lower risk. It was developed by our founder Mark Patton through four years of research analyzing the performance of stocks during more than a 50-year period.


Built on the success of others

There are few original ideas and diversification is certainly not a Patton original. Investors have been diversifying for centuries but it’s some leading university endowments, including Yale and Harvard, that have pioneered the use of investments beyond stocks and bonds and demonstrated the long-term success of doing so.

Super-Diversification incorporates many of the investment principles utilized by these very successful endowments. It’s important to recognize that these endowments do engage in certain investments, such as those that are illiquid, that are most often not appropriate for most individual investors and not part of Super-Diversification.


A portfolio tailored for you

Your risk and your goals are considered

Every investor is unique. We will take the time to get to know you so that we can build a customized Super-Diversified Portfolio that is appropriate for you. Following are some of the things we will take into consideration:

  • Your tolerance for risk (both financial and emotional)
  • Your investment goals
  • Your immediate and long-term needs
  • Your time horizon

Your Super-Diversified Portfolio will incorporate all of the great characteristics of Super-Diversification and be appropriate for your unique investment circumstances.


Additional highlights of a Super-Diversified Portfolio

Super-Diversified portfolios are designed to deliver to you a total portfolio solution. In addition to all of the above,
every Super-Diversified portfolio also has the following characteristics:

  • Great long-term performance
  • Safety and security
  • No upfront fees
  • No termination fees
  • No time commitment
  • Tax efficient funds
  • Automatic rebalancing
  • Highly liquid
  • Full transparency
  • Robust reporting
  • Very low custodial and transactions cost (not paid to Patton)

frequently asked questions

Q. What is an index fund ?

We must first understand what is an index. An index is something that measures the value and performance of a particular type of investment. For example, the Dow Jones Industrial Index is an index of 30 stocks that tends to be used to measure the performance of the U.S. stocks market (in particular large U.S. stocks).

There are hundreds of indexes to measure the performance of nearly any type of investment. Some of the more popular indexes are the following:

  • S&P 500 (U.S. large stocks)
  • Russell 2000 (U.S. small stocks)
  • MSCI EAFE (International developed country stocks)
  • Barclays Aggregate Bond Index (U.S. bond market)

Again, there are hundreds of indexes for all types of investments. These indexes are only mathematical calculations and not actual money. For example, the S&P 500 is an index of 500 U.S. stocks. The price of each of the 500 stocks is used to calculate the value and performance of the index.



An index FUND is simply a fund that is designed to replicate a given index with real money. For example, an S&P 500 index fund typically owns all 500 stocks in the S&P 500 index. Therefore, its performance is going to be virtually identical to the performance of the mathematically calculated S&P 500 index. These funds are considered to be passively managed meaning that they simply are designed to replicate the index and there is no manage actively trying to buy and sell securities.

Today there are 100’s of index funds…funds that are designed to replicate the performance of nearly every type of investment.

Not all indexes funds are created equally. As one example, there are many S&P 500 index funds and some will have very low fees and some will not.

Q. What is an ETF or Exchange Traded Fund ?

An Exchange Traded Fund, or ETF, is a fund similar to a mutual fund. The primary difference is that an ETF is traded on an exchange like a stock while a mutual fund is only bought and sold at the close of trading once a day.

The majority of ETFs are also index funds (addressed in a separate FAQ). The advantage of ETFs over mutual funds is that ETFs are sometimes a little less expensive than a like-typed mutual fund and ETFs sometimes offer access to more types of investments.

Q. What is an actively managed fund ?

There are generally two types of funds, passively managed (index funds) and actively managed. A passively managed index fund (addressed in a separate FAQ), such as an S&P 500 index fund, simply owns all 500 stocks in the S&P 500 and intends to replicate the performance of the S&P 500 index. An actively managed fund is own where there is a manager or team of managers whose job it is to try to buy and sell the right securities and the right time in an effort to perform better than an index.

The fact is that actively managed funds on average underperform like-type index funds. Higher costs, both higher expense ratios and other additional costs associated with operating the fund, are generally to blame for this poorer performance.

Q. What is a custodian?

A custodian is the entity that holds your money or investments (your account). Brokerage firms and banks are typically the custodian of investors’ accounts. The custodian is responsible for the safekeeping and reporting on your account.

One way to dramatically reduce the risk of fraud is to separate the role of custodian and manager. This provides investors with a good checks and balances and makes it nearly impossible for a manager to fraudulently take your money.

Q. What is risk tolerance?

Determining your risk tolerance is one of the very most important things you can do. Your risk tolerances is simply determining how much risk you are willing to take with your investments. Most often risk tolerance is determined by completing a questionnaire. These questionnaires are often very good tools.

Risk tolerance is both a combination of financial risk and emotional or psychological risk. Many investors can financial afford higher risk but emotionally they cannot handle the ups and downs that come with that higher risk.

Once an investor knows his risk tolerance, a portfolio then needs to be designed that is expected to deliver the desired level of risk.

Q. What is an INDEPENDENT investment advisor?

An independent investment advisor, often a Registered Investment Advisor (RIA), is one who does not work for a brokerage firm. Independent advisors tend to be less motivated to sell products and instead focus on giving the best advice to their clients.

Still have a question? Ask Patton

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