Personal Finance
Personal Finance
Portfolio Risk Management

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Our integrated investment approach places a strong emphasis on risk management, as the amount of risk you choose to assume may be the one aspect of investing that is within your control. Moreover, risk management, as a component of your asset allocation strategy, is an essential tool for helping you meet your investment objectives.

Managing risk through asset allocation

Broad diversification at the asset level may be one of the most effective steps you can take to manage the risk in your portfolio. Limiting your commitment to a single asset class and adjusting your asset allocations based on changing circumstances are also important strategies.

Rebalancing may keep us on track to help you achieve your objectives

We believe over time, investment performance can alter the asset allocation balance in your portfolio. For example, if an asset class outperforms, appreciation may increase the asset class' weight in proportion to the total portfolio value. In order to maintain your desired exposure to that asset class, it may be necessary to sell enough securities to return your allocation to the originally targeted level.

Rebalancing has been proven to lower risk and increase the probability of helping you achieve your investment objectives. Based on the impact of transaction costs and taxes, we believe that a portfolio should be rebalanced annually, or whenever asset class weighting deviates from the target by more than 5%.

Meeting the Challenge of a Dynamic Environment

At PNC, we take every measure possible to help you achieve your investment objectives. We manage asset allocation on an ongoing basis, through tactical risk control, to preserve the desired level of risk as market conditions change.

Extensive analysis and modeling forms the basis of our tactical allocation shifts, while our advisory team's deep experience and finely honed judgment allows us to fine tune the output of our models. Our tactical shifts in overweighting or underweighting asset classes are based on fundamental assessments of the asset class outlook. We act to help ensure that you continue to assume only the level of risk that is consistent with your investment guidelines.

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