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Before anyone becomes a client of our firm we complete a review of their current financial picture to include a review of their investment portfolio, retirement plans, insurance, real estate holdings, and all of their other assets. The first purpose is to determine if they need the help of a professional Registered Investment Advisor to reach their goals and objectives. "Can we help" is the question. In some cases individual investors are in good shape and do not need the help of professionals. In most cases we find they do.
The first step in every client relationship is to complete an Investment Policy Statement. It defines an individual's goals and objectives, the risk they are willing to assume, and the types of investments they want to avoid, among other things. In many ways it gives us our "marching orders".
We take the same specific steps for every client as part of our investment approach. We take steps to ensure risks are managed to include sound diversification of the portfolio and the high quality of individual securities. Our goal always has been to provide returns that are near benchmarks and to take risks that are less than benchmarks.
In managing a portfolio we integrate a top-down approach with a bottom-up approach. The top-down approach includes asset allocation (steps to increase equities when our disciplines tell us "times are good" and steps to reduce equities when our disciplines tell us "times are not so good.") The bottom-up approach includes individual security selection. Here's where we include tough disciplines to make sure we select securities that represent good value and, over time, will perform well. As in everything in life, there are no guarantees, but we work very hard at this.
This is an important part of what we do. It is important that the investment plan be integrated with a complete financial plan. In many cases we review estate plans, tax strategies, and insurance plans among other things. Our goal is to provide clients with a complete solution to their financial plans so that they can live the life they want to live and then some. Again, no guarantees, but we work hard and intelligently at this.
Every client receives a quarterly report from us and, if requested, meets with us once per quarter. (Less frequently if the client chooses.) The purpose in part is to review the Quarterly Report. The Report is the scorecard for the most recent quarter, one-year, and since inception time periods. It is simple to understand and shows you and us the progress we are making toward your goals and objectives. It also helps you measure if we are doing a good job for you as your manager. We think that's important.