Philosophy on Planning, Protection and Investing
We believe that a clearly defined set of principles is necessary to build productive relationships with our clients. The following principles outline our planning, protection and investing philosophy:
- Life planning means defining an ultimate life vision and mindfully moving towards that vision every single day. By integrating sound financial strategies into day to day decisions – keeping long term goals in mind – a client greatly improves the chances that dreams will become reality.
- Maintain the appropriate level of adequate, safe liquid assets for emergencies or unforeseen investment opportunities.
- Protecting accumulated assets through proper risk management is the foundation of any financial strategy.
- Assets needed for income during the next five years should be invested in vehicles that are not subject to market loss.
- Inflation is one of the greatest long-term risks facing individuals and families. Over time, and after inflation, equities as an asset class have historically provided long-term growth. Although past performance does not guarantee future results, we believe assets that will be used in the future must have adequate equity exposure and should be based on the client’s investment timeframes and his/her comfort levels with uncertainty.
- Investor performance is not the same as investment performance. Often it is not the investment, but the behavior of the investor, that determines the success or failure of a strategy.
- Investment according to a financial plan is our most important concept. Age, investment horizon, risk tolerance, etc. are all important factors in selecting appropriate investment vehicles. It is unethical to recommend an investment without first obtaining pertinent investor information.
- Although diversification will not guarantee protection against losses, it has been proven to dampen the effects of volatility on a portfolio. It also makes good sense.
- The science of diversification is called asset allocation. Based on Nobel Prize winning research, it has proven over time to help find the proper balance between risk and return. Asset allocation and Modern Portfolio Theory are widely used in today’s world of investing; however, like any investment strategy, asset allocation does not guarantee greater or more consistent returns.
- Studies have proven that success is determined more by time IN the market and the existence of an Asset Allocation Policy. NOBODY knows on any consistent basis when is the best time to get in or out of the stock or bond markets.
- Our clients look to us for management of their "Serious Money", therefore we do not try to pick individual stocks that may, or may not, outperform the general market. Diversification provides protection from volatility. Limiting a portfolio to a few companies may increase volatility without necessarily providing higher returns.
- Protecting accumulated assets through proper risk management is the foundation of any financial strategy.
- Our job is to help clients make informed decisions and exert the discipline necessary to build a comfortable future. It is the client's job is to take definitive action, make timely decisions and follow them through.