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The first pillar: Investment Management


“To be an investor, you must be a believer in a better tomorrow.”


Benjamin Graham

You’ll find the process of investment management to be a core strength of our firm. We dedicate the time required to ensure your investments are aligned with your priorities: Long-term investments for long-term needs, short-term investments for short-term needs and intermediate-term investments for the objectives in between. This provides the added benefit of designed flexibility within the portfolio to reflect any needed adjustments as your objectives evolve with time.

We’ll work closely with you to define and address the various types of risk, such as longevity risk, market risk, inflation risk, credit risk and interest rate risk, to name a few. The potential complexity associated with taking multiple risk factors into account in an investment strategy requires a disciplined approach, an approach we’ve defined within four key steps of our investment process.

Each step is centered on the development of your customized investment policy statement. If not already familiar, the investment policy statement, or IPS, details important considerations within your portfolio: Your customized asset allocation, type of investments and investment strategies, risk factors, tax considerations, time horizons and liquidity.

You’ll benefit from understanding what you own and just as important, why you own it. When put in writing this becomes an essential document to ensure your portfolio is in line with your financial plan and objectives.

Step 1: Investment Policy
Creating your investment policy statement lays the groundwork for your portfolio by establishing your return objectives and assessing your tolerance for risk, time horizon, constraints and liquidity needed within your plan. Capital markets assumptions make it possible to move beyond simply using historical data, which has been shown to encourage trend-chasing behavior in even the most sophisticated investor.

Step 2: Asset Allocation
This step is important because every investor has a unique risk comfort level. Your portfolio is built through a sophisticated process that seeks to maximize the return potential at each level of risk. Your custom asset allocation is driven by your financial plan objectives and seeks to provide you with diversification that is intended to keep you aligned and on track toward attaining your goals.

Step 3: Portfolio Construction
This involves filling in your asset allocation with the appropriate investment selections. We treat portfolio construction as a distinct piece of the process. We seek to combine investment strategies in ways that help maintain the integrity of the asset allocation by avoiding unintentional biases in the portfolio.

Step 4: Monitor
We proactively and continuously monitor each element of your portfolio. We believe that monitoring your asset allocation through periodic reviews is critical. We continuously monitor all managers and investment selections in an attempt to proactively identify whether there are any changes to their situations or investment processes that could impact performance. We also search for and evaluate potential managers and investment options that meet our strict requirements for inclusion. By defining a process for investment management tied to your financial plan you can remain confident that you’ll have an investment process overseen with a clear understanding of your priorities.

Asset allocation and diversification do not guarantee a profit nor protect against loss. There is no assurance that any investment strategy will be successful. Investing involves risk including the possible loss of capital.

NEXT: See the second pillar: Planning Strategy

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