A key to your successful investment experience is our focus on understanding your personal goals. Once we understand your personal goals, we develop an investment strategy which is aligned with them. Our initial focus is not on which stocks or investments to buy.
This is a big picture view. We want to understand your thoughts, feelings and priorities about:
- Your various investment goals, such as saving for your retirement, funding education for your children or grandchildren or purchasing a vacation home
- Retirement planning
- How comfortable you are with stock market volatility
- What your investment time frame is and how the time frame may differ for each goal that you have
- Charitable desires, both now and in the future
- Providing financial support to family members
Once we identify your goals, we develop your portfolio. If you have various goals, you may have multiple portfolios, each with different timeframes and asset allocations (for example, the percentage that is allocated to stocks v. fixed income). For example, a portfolio for a child starting college in 3-5 years would have much more invested in fixed income (more conservatively) than the same family’s retirement portfolio which is to last 40+ years in the future.
We tailor each investment portfolio based on your specific individual needs and personality, considering such things as your comfort for risk and stock market volatility. It is important to emphasize that we do not make these strategic asset allocation decisions based on predictions or guesses about the near term direction of the stock market. That is not a winning strategy. The most effective strategy is to design a portfolio (or multiple portfolios) that has the appropriate stock market allocation to meet the desired goal(s) that you have.
As every person is different, every portfolio will be different. We make decisions to buy or sell investments based on each client, individually and one at a time. Unlike some other financial advisors or money managers, we do not make buy and sell decisions for all of our clients at the same time. If you are not a client or have another advisor and frequently see relatively small trades of stocks or mutual funds, that is an indication that the advisor is managing all of their clients’ portfolios as one. That is not our approach. We take a highly individualized approach to investment management.
To show you how your personal goals should be reflected in your investing, let’s review some hypothetical examples.
Family A is a couple with a $10 million portfolio. Their personal portfolio of $8 million is invested with a 35% stock / 65% fixed income allocation, as their primary goal is to maintain their standard of living while providing some opportunity for growth. They have also established a $2 million family foundation, which has a 50% stock / 50% fixed income allocation. This allocation is more aggressive than their personal allocation, as the family foundation portfolio has a much longer time frame and they are more willing to take risk in this portfolio.
Family B is a couple in their 60s with $20 million invested with a 70% stock allocation. They have many other assets and are still accumulating wealth. They are comfortable with stock market volatility, desire growth and recognize the long term benefit of greater stock market exposure.
Person C is a 70 year old woman who was widowed. She has a $5 million portfolio and is very comfortable with a 50/50 portfolio, which provides her with both growth opportunities but not excessive volatility.
Family D is younger with significant income and 3 children, ranging from 10-17. For their long term savings and retirement portfolio, they are 75% invested in stocks. For their children’s college saving accounts, each child has a different portfolio, ranging from their youngest child (65% stocks) to their child close to college age (less than 20% stock exposure).
- Investing is personal and should reflect your personal goals and comfort level.
- If you have different goals with different time frames, you may want to have different portfolio allocations for each.
- Your goals, assets and comfort levels change over time. As we manage your investments in a very individualized manner, we would make portfolio adjustments as your life changes.