Successful Investment Management:

Laying the Groundwork

Successful investing does not begin with the question: “Where should I invest my money today?”

An orderly, almost scientific, approach is necessary for successful management of your investment assets. We approach investing as a multistep process. This article focuses on the first step: assessing your financial needs and goals, tolerance for risk, investment time horizon and other constraints you may have.

Defining goals and needs

Each of our clients is unique. Therefore, to determine a client’s needs, our professionals will meet with you to discuss every aspect of your finances. We will ask detailed questions about your income sources and expenses. We will evaluate your current investments and retirement resources and review your family circumstances. Thanks to this in depth process, we can help you pinpoint accurately both your short-term and long-term investment goals.

These goals vary widely from individual to individual. For example, one person may be looking to obtain sufficient capital in a relatively short time in order to acquire a business interest. Another may seek to accumulate assets for a vacation home or to acquire investment real estate. Parents or grandparents may want to build a college tuition fund for their offspring. And everyone is concerned about either saving for retirement or preserving assets during their later years.

Assessment is not just a one-time event, but a continuing process. As changes in economic conditions, tax laws and personal circumstances dictate, we will review and update strategies with you regularly.

The issue of risk

There are several factors that will determine whether a particular investment strategy is right or wrong for you, one of which is the risk associated with your asset allocation decision.

The assessment process includes probing your tolerance for risk. Are you someone who is at ease with upswings and downswings in the market or are you apt to spend nights worrying when the market makes even a minor downward turn? Part of the comprehensive analysis conducted by our investment professionals is helping our clients discover their investment “comfort level.”

The matter of time

Closely associated with the issue of risk is your investment time horizon. By analyzing your short- and long-term goals, we can assist you in choosing the investments to match those goals.

The general rule is simple: If you will need cash in the near term, your portfolio should include sufficient liquid and low-risk investments. Usually, these lower-risk investments (short-term Treasuries or money market funds, for instance) carry a lower return as well.

Many of our clients, however, are investing for the long term. Their portfolio is likely to lean more heavily on a diversified selection of stocks, which in the short term may be somewhat volatile but when held for the longer term offer a better return.

Because we take the time to understand your complete financial picture, we can fine tune your investment strategy to meet your particular circumstances.

Other considerations

Your tax status must be part of the investment equation. Investment return figures usually ignore the damage inflicted by income taxes. After the IRS takes its share from the interest and income earned, as well as the capital gains realized, our clients often find what’s left is less than satisfactory. In order to make your investment portfolio truly productive, we will take a look at your income tax bracket and determine to what extent tax-exempt investments may be used to reduce your tax exposure.

The other steps

Our investment management services go far beyond what we have outlined here. For instance, once we have gathered all the necessary information, we will put together an investment profile. Using this profile, we will be able to structure a matching asset allocation strategy, select the appropriate securities for the classes of assets that make up your allocation strategy, and closely monitor your portfolio, making adjustments as time and events dictate.

To find out more, please contact us.