One of the greatest rules relating to investing is having a strict discipline. Markets around the world change very quickly and the difference between a below average or above average return can be simply the discipline with which decisions are made. Over the years I have developed a disciplined six-step process that I use with every client.
This is where most of our meeting time will be spent. The reason for this is that the planning stage sets everything up for success. Together we evaluate and identify the goals and objectives. We look at concepts such as investment objectives, asset categories, target returns, desired returns and risk tolerance profiles to evaluate goals and objectives.
We explore how you feel about risk and assess the level of risk you are proposed or, more importantly, you need to take to achieve your investment objectives. This assessment is accomplished through use of an assessment tool. It is designed to determine an actual range that is appropriate for your specific situation.
The Investment Policy is a written document that is used as a guide through the investment process. It becomes a document that can be reviewed periodically to ensure we are sticking to the strategy and keeping to our disciplined process. It is very easy to get caught up in the moment whether things are up or down. Emotions can very easily cloud the investment decision process. Using the Investment Policy provides us with a framework to review our achievements. Although it is a written document, it is designed to be flexible and can be altered to changes in direction or changes in your life. It is created with the individual in mind and as individual situations change so must our strategy.
This step is the principle part of the operation in which direct investment decisions are made. It is the day-to-day work done for the portfolio. It allows us to concentrate on the strategic issues that impact the portfolio the most over time. These issues can include the asset mix changes, rebalancing and individual investment selections.
This is the step that allows us to go back and evaluate the progress of the policy. Although we do this daily we have to do a more complete analysis on a regular basis monitoring the progress of an investment policy.
This is the step where we report on the progress of our strategic plan. We meet on a regularly scheduled basis to review the previous period and also to discuss our expectations for the future. We also review life style changes that you are going through to ensure that your investment strategy is clearly aligned with your needs and goals.