OUR PROCESS

Our goal is to produce consistent results for our clients. We do not participate in fads and we don’t take bets. We rely on our clearly defined, institutional-level investment process based on financial theory and industry best practices, informed by both quantitative and qualitative factors.

Our Investment Philosophy

Our investment management process is guided by four governing principles that have been validated both by decades of market data and by academic research in financial theory.

  • Markets work: Capital markets generally do a good job fairly pricing available information and future expectations about publicly traded securities.
  • Diversification is key: Comprehensive, global asset allocation helps manage the risk associated with individual securities.
  • Risk and return are related: Taking on increased risk has the potential to earn greater returns.
  • Portfolio structure explains performance: The asset classes included in a portfolio and their associated risk levels are responsible for the variability of returns.

Our Approach to Portfolio Construction

Determine the required rate of return

Through our financial planning process, we quantify spending and savings goals, and an assumption about the required investment rate of return necessary to pursue them.

Choose an overall stock/bond allocation target

Taking risk tolerance into account, we choose one or more overall stock/bond allocation targets that we believe may have the highest likelihood of achieving the required investment rate of return objective. This is generally determined based on both quantitative modeling of historical performance and expected returns and qualitative factors including judgments about the future such as economic growth rates and fair valuation.

Determine individual asset class weights

After we establish the overall stock/bond allocation, we further deconstruct the allocation into individual asset classes and specific weightings for each asset class. An individual portfolio usually has 8-15 asset classes represented.

Choose individual investments to make up the portfolio

Once we have chosen the allocation targets for each asset class, we select the individual investments to include in the portfolio based on our investment selection process.

Monitoring & Changes

We continuously monitor the performance of each portfolio in an effort to ensure expected results. We revisit the key planning assumptions in the financial plan on at least an annual basis in order to identify opportunities we believe will maintain the probability of achieving the plan goals.

*A diversified portfolio does not ensure a profit or protect against loss in a declining market.
Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity.