Our investment planning process involves several factors:
- Your goals
- Strategic asset allocation
- Investment product strategy
Your Goals and Investment Planning
The investment process starts with your goals and dreams. We then quantify how much you will need to accumulate to fulfill what you envision.
Your Values and Investment Planning
How you make money can easily be in conflict with your values. Investments are often packaged where you have no idea what you are invested in. Socially responsible investing aka environmental, social and governance is a specialty of ours we discuss this further here.
Taxes and Investment planning
Where you invest your money can impact your return. What good is it to make a $1 when you have to give back $.40. That is especially painful when you could have reduced that to $.20. Decisions about investment management should include reducing the tax bite.
Strategic Asset Allocation and Investment Planning
Asset Allocation is the ongoing process of deciding how to mix different types of investments in your account based on your personal objectives and current or anticipated market trends. How important is Asset Allocation? It determines over 93% of your investment success. At the strategic level it is the Mix of Stocks, Bonds, and Cash in Your Account.
An asset is anything that produces income or can be purchased and sold, such as stocks, bonds, or certificates of deposit (CDs). Asset classes are groupings of assets with similar characteristics and properties. Examples of asset classes are large-company stocks, long-term government bonds, and Treasury bills.
Every asset class has distinct characteristics and may perform differently in response to market changes. Therefore, careful consideration must be given to determine which assets you should hold and the amount you should allocate to each asset.
We will use this strategic asset allocation to evaluate your chosen investment strategy during the build phase. We will compare the risk and return of the investment product to an appropriate benchmark index or to a group of similar investment products.
The asset-allocation decision is one of the most important factors in determining both the return and the risk of an investment portfolio. An often quoted study showed that it accounts for over 93% of your investment success.1 We believe that it makes sense to find a risk level that you are comfortable with and let the strategy run its course.
Product strategy and Investment planning and
You may want to enjoy a certain investment product or insurance/investment product. These choices may limit your options. They may also have higher costs than other investments. It is important to consider all factors before making a final investment choice.
(1) Source: Gary P. Brinson, Brian D. Singer and Gilbert L. Beebower, “Determinants of Portfolio Performance II, An Update,” Financial Analysts Journal, May-June 1991.How Do I Manage My Asset Allocation?