Before you engage a firm to assist you with your personal financial needs, you should be aware of their process and beliefs so as to determine how compatible they are with your beliefs.
We believe that investment success isn’t a random outcome. On the contrary, it is the result of a careful plan that has been applied in a disciplined fashion over a period of years.
Here is what we believe. We use these beliefs to assist our clients:
Step One…Create an overall plan:
- Planning is important. Your overall financial, investment, retirement, income tax and estate plans should provide the framework for the vast majority of your tactical financial decisions.
- You should know the answers to these and other important questions: What are my retirement objectives? How much of my current income can I save for retirement? How much income will I need at retirement? Starting when? For how long? How will inflation affect my income during retirement?
- When you know the answers to these questions we can help you answer perhaps the most important question: What rate of return is required of my portfolio in order for me to meet my objectives?
Step Two…Build an overall portfolio designed to meet your required rate of return:
- Bonds, cash and other fixed investments can help you keep your wealth. Stocks can help you grow your wealth.
- The Asset Allocation decision, i.e. how much of your wealth you put into bonds, cash and other fixed investments vs. how much you put into stocks can be the largest determinant of your portfolio’s return over time.
- We believe that the long-term future returns of the markets will closely mirror the long term past returns of the markets.
- Style diversification helps to smooth out the inevitable bumps in your portfolio over time. Style diversification in the stock market means buying large, mid-size and small companies, growth and value companies, US and international companies. In the bond market it means varying your maturities and credit quality.
Step Three…Select Outstanding Fund Managers to select securities for each style of investment:
- Fund Manager Selection is a critical part of your long-term success as an investor.
- Mutual Funds are one way for most investors to participate in the markets.
- Fund Managers who pass our critical review process manage funds that can give you an increased chance of helping you grow your wealth.
Step Four…Monitor the Portfolio on a Regular Basis:
- Managers retire, change jobs, just like other people. You need to make sure that the managers of the funds you are invested in remain top performers.
- Your portfolio needs to gradually become more conservative as you approach retirement.
- You need to periodically measure how you are doing quantitatively against your overall plan.
- The frequency of your review should be determined by your age, portfolio size, risk tolerance and personal preference.
- Your patience and discipline are the most necessary ingredients for your investment success.