We believe asset allocation is an important investment decision. Portfolio objectives, risk tolerance levels, economic conditions, market valuations, and trends over (three-to-five year) cycles play important roles in this process. Within asset allocation sectors, we believe in diversification; not to the point of diluting performance, but to hedge against industry or maturity erosion. A portfolio with a great degree of diversification will bring sub-standard performance. There is a delicate balance to attain a performance-oriented type of diversification which leads to superior performance.