Investments are just one part of your financial plan. But they are a big part. They are what will compound your wealth while you are working, and what will create an income for you when you retire. They also determine if you will create wealth that will live on after you are gone.
Our first priority is establishing an invesetment policy statement. Just like you have your financial plans for your dreams and goals, identifiying and setting goals for your investments and understanding your tolerance for risk his critical in determining the most rewarding strategies for you.
By creating an Investment Policy Statement for you and your family it sets parameters and expecations of what you want to achieve, along with the reason of why we invest the way we do. This is one of the most imporant things a Financial Advisor can do to give you more transparency and clarity on how your money is invested and what the purpose of your investments are.
After we determine your investment goals we create strategies that are tailored to achieving those goals within your time frame.
Pinnacle Ascent Investment Policy Statement - Sample
“Diversified Income” portfolio designed for balanced income to generate dividends of 4-5% for income distribution and are for those moderately comfortable with stock market volatility. Approximately 40-60% of the portfolio is invested in equities and equity funds. Around 30-40% fixed-income securities, e.g., debt obligations, government-backed bonds, short-term, high quality corporate bonds, treasury inflation protected bonds, municipal bonds, high-yield bonds, and money market funds. Allowances are for up to 10-15% in liquid alternatives and holding 3-4% in cash.
“Diversified Market Growth” portfolio. It is for investors who are comfortable with stock market risk and who seek returns comparable to a benchmark of 60% S&P 500 Index/40% MCSI EAFE Index with lower volatility and an ability to rebalance periodically. These investors recognize that in order to build wealth over time they must invest in assets that potentially can, in unfavorable markets, show a capital loss over significant time periods—two to five years. The portfolio is invested 75-85% in equity funds and common stocks and has a target volatility of 80% of the S&P 500.
“ThermoDynamic” portfolio strikes a moderate balance between stocks/bonds/alts, using income to reduce risk while still seeking capital appreciation from stock investments. Strategy also seeks to minimize downside risks by gaging the market “temperature.” This portfolio vacillates from high amounts of equity exposure to more moderate levels of equity exposure over a large range, 40-80%. Essentially, when the market is hot you turn the portfolio temperature down and when the market is cold you turn up the heat. Rebalancing rules based on analysis of the portfolio and market conditions.
"Custom" portfolios are designed for many clients who have additional or multiple needs. For example: if making changes could cause unwanted taxable events we would create a potfolio to minimize that particular outcome.
If the desire was to create a portfolio with high income but also higher opportunity for growth it could be majority income producing stocks.
If the goal is to minimize volaility in return for lower expected returns, a different portfolio strategy can be taken.
*Please Note: No guarantee can be made that these investment objectives can be met or that your investment will not have incurred a loss at the time of withdrawal.*