As with any investment in life - a family, a home, a college education, the best results are achieved by carefully constructing a plan and following that plan consistently over time. A well-crafted investment plan allows you to set specific investment goals and the strategies by which to attain those goals.
While each investor’s situation is unique, investment plans always address certain factors, including the reasons for the investment, the investing horizon and the degree of risk that an investor can comfortably tolerate. The investment plan will serve to guide us as we work together to achieve your long-term financial success. Our process centers around six steps:
1. Assess your goals and circumstances. The investment plan process begins during our first meeting with a discussion of your financial and non-financial values and goals, as well as your existing assets.
2. Set long-term investment objectives. Taking into account the long-term nature of successful investing, we set objectives for your portfolio that are appropriate for your attitude towards risk and investment horizon.
3. Plan your asset allocation. Because it is so important, asset allocation is the first investment decision. During this process, we decide how much of your portfolio to invest in each of the different investment types, or asset classes, including stocks, bonds, real estate, commodities, cash, short-term investments, domestic and international.
4. Select your investment approach. With an asset allocation in place, we now select the investment vehicles that you will use to implement your portfolio strategy. Two key investing principles guide these decisions: the importance of diversification and the value of remaining invested.
5. Build your portfolio. Building on the first four steps, we construct a portfolio suited to your needs, goals, investment horizon, and risk tolerance. The building blocks for the portfolio are institutional asset class funds which provide the optimal way to implement a diversified portfolio.
6. Report, Rebalance, Review Progress. When our ongoing review of your situation indicates that changes and re-balancing in your portfolio are warranted, we make those changes as needed. On a quarterly basis, we meet to review and discuss: portfolio performance, tax planning, progress towards your personal financial planning goals, and any changes in your personal circumstances that might warrant a change in strategy.
The result of this process is a straight-forward, disciplined plan to optimize your probability for success.