Asset Allocation Program

A managed account program seeking to minimize risk and earn above market returns

The Asset Allocation Program is the underlying investment philosophy that helps to determine capital allocated to the Cornerstone Fixed Income Program, the Risk Controlled Equity (RiCE) Programs and alternative assets. We carefully assess the risk/return profile of the entirety of a client's asset base and income stream to optimize allocation for each client's requirements.

Brookstone Partners

Brookstone Partners focuses on a "sleep at night" approach to investing and asset allocation. This does not mean we target low, boring returns, only that we understand the risk we are taking and expect to get paid for it. Every five years or so (2007, 2002, 1998...) many money managers claim that their performance has been affected by a once in a lifetime 100 year flood. We believe that our clients' investment approach can plan for this and avoid much of the fallout. The result is that we reduce risk, maintain liquidity and over time are highly likely to out-perform most investment approaches.

Portfolio Construction Principals

Brookstone constructs portfolios to control risk. When risk is taken, modest sums are invested with limited downside risk and strong upside potential.

	Cornerstone Fixed Income Program - The Portfolio Anchor The Cornerstone Fixed Income Program focuses on low credit and interest rate risk.
	Risk Controlled Equity (RiCE) Program - Next Generation Indexing RiCE Programs track respective equity indexes with limited downside.
	Private Equity, Venture Capital, Mezzanine and Other Alternative Funds For appropriate investors, modest sums (5-15% of assets) should be invested with the goal of significantly increasing wealth.
	Brookstone Partners Asset Management Balanced Portfolio A balanced portfolio can be achieved with the Cornerstone Fixed Income Program, next generation equity indexes in the RiCE Program and alternative investments.

Sample Portfolio Illustration

Any asset allocation program should be thoughtful and highly customized. By analyzing a simple 50/50 allocation to the Brookstone Risk Controlled Equity (RiCE) program and its Cornerstone Fixed Income program, we show that "sleep at night" investing provides half the volatility and higher returns than an S&P 500 and bond portfolio.

Below, we compare a 50/50 portfolio of the S&P 500 and 10 year treasury to the RiCE S&P 500 with the 10 year treasury. Please note that since the Cornerstone Fixed Income program is highly customized, we use the 10 year treasury as a proxy. Therefore, we are assuming no benefit or increased return from the fixed income program.

50% S&P 500, 50% 10 Year Treasury vs. 50% RiCE S&P, 50% 10 Year Treasury

Trailing Annualized Returns as of 12/31/08

For additional information please review our Product Brochure

Brookstone Partners Asset Management provides investment advisory services through Partnervest Advisory Services, LLC, an investment advisor registered with the Securities and Exchange Commission. Results relating to the RiCE S&P 500 account performance are based on back-tested model data and do not represent actual results realized by any individual investor. There may exist better benchmark comparisons than those offered herein for modeled performance data. Modeled returns are shown gross of fees. Fees associated with the RiCE and Cornerstone products will vary by investor based on each investor's assets with Brookstone Partners Asset Management and each within each respective product account. Material economic events or conditions will have positive or negative impacts on the performance of both Cornerstone and RiCE accounts. While RiCE accounts seek to limit losses to 15% when components are held to maturity, the market value of a RiCE account can from time to time have mark to market losses in excess of 15%. The RiCE and Cornerstone account model performance shown includes the value of re-investment of interest and dividends from prior periods. Consider the investment objectives, risks and charges and expenses of the Brookstone Partners Asset Management managed account investment programs carefully before investing. For this and other information about Brookstone Partners Asset Management investment programs, please contact Brookstone Partners Asset Management at (212) 302-7667; on the internet at www.BrookstonePAM.com or by mail to Brookstone Partners Asset Management, 317 Madison Avenue, Suite 405, New York, NY 10017.