Understanding Our Investment Due Diligence Process

A solid investment strategy can help you pursue financial independence. But to be truly effective, any investment strategy must be customized to your unique situation.

The goal of a custom-designed portfolio is to potentially achieve an optimal blend of investments tailored to your personal goals, time horizon, and risk profile.

This process encompasses setting investment objectives, establishing weightings for various asset classes, choosing specific investments, and making adjustments as circumstances dictate.

By working with an advisor who acts as a behavioral coach, you could improve your results. A 2016 study found that working with an advisor can add 3% in net return.*

Personal Goals, Asset Allocation & Time Horizon
First, we work together establish and prioritize financial goals and time frames for achieving these goals. Most of us have multiple competing goals – and that’s why our firm uses a comprehensive financial plan as a baseline before building an investment account.

Next, you will complete a risk tolerance questionnaire, which will identify your risk number. This helps identify your acceptable level of risk and reward. Think of your risk number like a speed limit, we don’t want to pick assets that are too fast or too slow for you. 

Then, based on your goals, we select an asset allocation strategy. This involves distributing your investments across several asset classes—such as stocks, bonds, alternatives and cash equivalents. Asset allocation allows your portfolio to participate in a variety of market sectors while potentially minimizing overall volatility. Keep in mind that asset allocation doesn’t ensure a profit or protect against a loss.

Risk Profile
Risk tolerance refers to your personal desire to assume risk and your comfort level with doing so. If you find that you can't sleep at night because you're worrying about your investments, you may have assumed too much risk. Your risk tolerance is also affected by your financial ability to cope with the possibility of loss, which is influenced by your age, stage in life, how soon you'll need the money, your investment objectives, and your financial goals.

Fiduciary Score
When choosing investments, we evaluate each investment using a 12 factor pass/fail analysis. We look at investment style, performance, risk and risk adjusted returns, and other qualitative factors.

Ongoing Monitoring
The financial planning process doesn't end once your initial plan has been created.

Quarterly we rebalance portfolios, to bring them in line with the desired asset allocation. At this time we also re-examine the Fiduciary Score of the funds we’ve selected. A score below satisfactory for two quarters in a row flags an investment for removal.

Client Review
We aim to review plans with our clients from two to four times a year. During that process we evaluate how your plan is performing relevant to your goals. We may adjust your plan If your goals or time horizons change; you experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss; or you have a specific or immediate financial planning need.

Wherever your financial goals take you, we can help you get there. Contact us today.

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*Vanguard’s Advisor Alpha, 2016.