The planning for your financial future, and the resulting investment recommendations, are very serious matters. We understand this responsibility, and have developed the following summary statement of Investment Philosophy and Process so you may have a better idea of what you can expect from our firm.
Financial planning and investing is setting a series of goals to achieve a desired result. It is not a process unto itself. It must be considered in the entire context of your economic and non-economic desires. Our approach to financial planning and investment encompasses five basic steps, which are enumerated below:
- What are the goals and risk tolerances of our clients?
- What is the length of time that the portfolio can be committed to a specific investment policy?
- What asset classes (stocks, bonds, money-market securities, mutual funds, etc.) will be considered for investing and how much of the portfolio will be invested in each asset class?
- Within each specific asset class, what strategies or styles will be used and which manager(s) will be selected to manage each specific strategy or style?
- How will the monitoring process be implemented?
Diversification is considered by many investment professionals as the most important component to consider when determining an investment philosophy to reach your long-range financial goals.  Studies have shown that approximately ninety-two percent (92%) of gains in a portfolio come not from selection of a particular investment item, not from the appropriate timing of making an investment, but rather from the diversification and allocation of your assets over a spectrum of investment classes. Many individuals, making their own investment choices, develop “analysis paralysis” in making investment decisions, because they are trying to choose the “perfect” investment at the “perfect” time. Our firm continues to dedicate our time and efforts to defining your goals and then outlining a broad strategy to develop and maintain the appropriate portfolio allocation and diversification, personalized to meet your specific risk tolerance, financial objectives and time horizon. Diversification and asset allocation do not assure a profit or protect against loss in declining markets.
We consider timing and selection in proportion to its degree of benefit to your portfolio. As we attempt to provide portfolio allocation and diversification against a broad spectrum of investment classes, we will generally not use individual securities, but rather use mutual funds (both open-end and closed-end funds), ETFs (exchange-traded funds), UITs (unit investment trusts), and portfolio managers as appropriate. We are not “stockbrokers” in a traditional sense of the word. This does not preclude the use of individual securities if you have a need to hold these, or if there are specific issues in which you may have interest. As a general rule, however, we are trying to establish a disciplined, diversified approach to investing.
This means many things to different people and each of us has our own risk tolerance level. Our goal is to develop an appropriate risk management strategy to match your risk tolerance. In general, risk is defined as the possibility of an investment losing principal value, or the loss or reduction of returns that it pays. If you allow risk avoidance to dominate your investment strategy, your return becomes subject to the risk that after taxes and inflation, your investment goals are not achieved. Bottom-line: there is no free lunch or a “risk free” investment strategy.
METHOD OF COMPENSATION
We are fee-based planners. Please refer to our Form ADV Part 2A for additional information.
 Shapiro, David, ;Retirement Countdown, FT Prentice Hall, 2004, pp. 137-138.
Brinson, G.P., Singer, B.D. and G.L. Beebower, “Determinants of Portfolio Performance II: An Update”, Financial Analysts Journal, May-June 1991.