The American Dream for most comes with a home and a mortgage.

Recently, we’ve seen that dream come under siege as record numbers of homeowners lost their homes through foreclosure. This decline has put exceptional downward pressure on mortgage loans as well as housing prices.

While the market for these loans may be in the discount region, we offer:

• Opportunities for investors to potentially profit from the current environment
• A way for committed homeowners to restructure their loans and keep their houses

Over recent years, many portfolios have proven less efficient than believed because of too much correlated behavior among investments. For example: Real Estate Investment Trusts (REITs) have historically provided a counter-balance to the performance of domestic equities.

Correlation is a measure of the degree to which the value of different investment types move in the same direction. If they perform independently of one another, they are non-correlated.

During the correction of 2008-2009, however, these two sectors tended to move together.

The likely outcome for overly correlated portfolios was articulated in a study conducted in 1986 by Gary P. Brinson, L. Randolph Hood and Gilbert L. Beebower. Together, they highlighted the fact that the vast majority of share price variation in a portfolio was attributable to asset allocation.

Through better asset allocation, therefore, investors could take advantage of a theoretical, quantitative “Efficient Frontier” that may offer a higher level of risk-adjusted total return. The Efficient Frontier is a concept in modern portfolio theory. A combination of assets, i.e. a portfolio, is referred to as “efficient” if it has the best possible expected level of return for its level of risk (usually proxied by the standard deviation of the portfolio’s return).

No level of diversification or non-correlation can ensure profits or guarantee against losses.

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