1. Portfolio Diversification – Investors should focus on strategy diversification and not security over-diversification (di-worsification); diversification is not achieved by allocating to hundreds of stocks, or multiple managers expressing the same type of investment or investing a small amount to an “alternatives” bucket.

2. Risk Assessment -- Investors should work to identify, embrace, and combine the risk factors that they find attractive and believe will collectively provide the performance they desire from their portfolios.

3. Return on Invested Capital -- Every investment an investor makes will have some type of risk associated with it, and therefore investors must be comfortable that the return characteristics are fundamentally attractive.


Benchmarks and Indices: The valuation information shown for the various indices is available from public sources. AM Global Wealth Management makes no representation as to its accuracy. Comparisons between a composite and an index or benchmark are unreliable as performance indicators and should
not be considered indicative of the actual performance to be achieved in a particular account.

• HFN CTA Index: Macro strategy managers trade a broad range of strategies in which the investment process is predicated on movements in underlying economic variables and the impact these have on equity, fixed income, hard currency and commodity markets. The HFN CTA/Managed Futures Index tracks performance of 627 fund products with a primary strategy that involves trading a variety of natural resource, energy, financial or other types of commodities primarily through derivative markets. Additionally, HFN tracks asset flow information on the sector on a monthly basis.

• S&P 500: The S&P 500 consists of 500 widely held common stocks, consisting of four broad sectors (industrials, utilities, financial and transportation). It is a market-value weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value. This index is a total return index with dividends reinvested.

• HFRI Fund Weighted Index: HFR utilizes an objective, rules-based methodology that includes over 2000 hedge funds across four main strategies, each with multiple sub-strategies. The index seeks to combine and weight these strategies to provide a representation of the composition of the global hedge fund universe.

• EQ Portfolio – A portfolio comprised of the three strategies however with the same weights (33.33%) proportionately distributed among each strategy in the portfolio through time.

• Value Added Monthly Index (VAMI) - Value Added Monthly Index (VAMI) is the industry standard for evaluating the performance of investment managers. It indicates the value a manager has added to an investment via a cumulative index and because it excludes non-trading expenses such as tax, it can
be used to compare investment managers. VAMI shows how an initial $1,000 investment has grown over time.


Andrew Mehalko is president of AM Global Wealth Management LLC in West Palm Beach, Fla.  He was chief investment officer of the investment committee and operating committee member for GenSpring Family Offices for 12 years prior to founding AM Global Wealth Management. GenSpring grew from $450 million of assets under advisement to more than $20 billion, becoming the country's largest independent multi-family office.

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