IMPORTANT NOTE: Now is a CRITICAL time to make wise choices. We believe a period of significant volatility is ahead; and if you see this as a concern instead of an opportunity, please call us.
1 ASSESS GOALS AND RISK PREFERENCES
For many frustrated investors, their expectations have not been met because their expectations have not properly been measured.
If you choose the wrong road, drive the wrong speed, or take the wrong vehicle, you'll be significantly less likely to arrive where you want to be - when you want to be there.
Plan Your Optimal Route
Quantify Your Optimal Speed
Engineer Your Optimal Vehicle
Using a scientific framework that won the Nobel Prize for Economics, we are able to engineer a portfolio to fit your unique risk preferences and meet your investment expectations with a 95% mathematical confidence.
How risky is your portfolio?
Watch this 83-second video, and contact us for a complimentary risk analysis of your portfolio.
HOW TO MEASURE YOUR RISK TOLERANCE:
Performing a basic "Time Value of Money" calculation will identify the Rate Of Return necessary for your investment portfolio to achieve the desired Future Value over your specific Time Horizon.
Here's the key to investment success:
Maintain speed at your Target Rate of Return and ignore other speeding vehicles:
The progress of your investment portfolio should be measured over time by how well it's meeting your Target Rate of Return; not the Dow Jones index, not the bragging neighbor, and not the "smart sounding" pundits on TV.
Grow to your Future Value by avoiding emotional driving:
Investors don't like to see their account values go down; which is when many investors unintentionally prevent their investment strategy from maturing into its Future Value by reacting impulsively at the worst possible times; selling what they should probably be buying, and chasing what they should probably be avoiding.
Don't rush your Time Horizon or increase the risk of crashing:
Pursuing higher returns comes with the increased potential for higher losses. Why would you risk driving 100 miles per hour to your destination if you have plenty of time to get there? It's similarly important to align your investment strategy and risk with the Time Horizon of your goals.
2 CREATE YOUR INVESTMENT POLICY STATEMENT (IPS)
Next, we will document the process of achieving your investment objectives with a written Investment Policy Statement.
With your input and your goals in mind, we draft your Investment Policy Statement. Your IPS spells out how investment decisions will be made for your portfolio including return expectations, income requirements, risk tolerances, and time horizons; all tempered with any other criteria important to you as we set out to achieve your financial objectives. This process is ongoing and evolves as your circumstances change.
Clients often come to us with relatively suitable investments but a disproportionate exposure to risk. In these cases, we seek to realign the portfolio without selling everything, paying the taxes and starting all over again.
We know that taxes can be a tremendous drag on a portfolio's total return, and employing strategies to reduce them can produce better net returns without incurring additional risk.
We know many financial products are burdened with ambiguous fees and unnecessary expenses, buried in the fine print of confusing disclaimers. Reducing or eliminating these costs is another effective way to save our clients money.
We also know that emotions often drive or inhibit investment decisions. We believe that not making an investment is just as important as making one, and adhering to the disciplines of a strategy, prudent risk management, and having a written investment policy are essential to fulfilling a client’s long-term objectives.
3 STRUCTURE THE PORTFOLIO
Each client’s investment portfolio is crafted from the knowledge and expertise of our collaborative Investment Committee along with some of the leading portfolio managers from around the world.
Large institutions will often scale their operations by generalizing consumers into model portfolios. This may allow them to become large and profitable with minimal effort, but we don't believe it delivers much value.
At FirsTrust, each portfolio is different, depending upon the client's personal objectives and the existing components of their investment accounts. With a hierarchy of your goals, respective timelines and risk tolerances, we have the framework for selecting investments and allocating capital to each objective.
As truly independent wealth managers, we can evaluate and select investments from anywhere; not just a company menu of choices that favor the shareholders of a financial institution.
And, as true fiduciaries, we can guarantee the impartiality and objectivity of our investment opinions.We know the widest selection of the world's best performing investments is rarely ever found at the local bank or brokerage. As a truly independent firm, we are free to evaluate investments across the globe for the most appropriate components of each client's portfolio.
The blended perspectives, approaches and backgrounds of our collaborative Investment Committee decisively minimizes the shortcomings of any single investment approach or analytical tool. The Investment Committee endeavors to continually distill our best ideas and practices down to implementation strategies, asset classes, and eventually specific investment selections for the benefit of all our clients. Each of our Advisors is then empowered to make the granular decisions given each of their client's unique mix of goals and circumstances.
The process of discovering your asset allocation framework is ultimately intended to maximize the probability of achieving your specific goals; so no single approach to asset allocation is appropriate for everyone. Your mix of taxable vs. tax deferred investments, asset classes, amount of funds and cost basis is different than other investors; your asset allocation strategy should be too.
Strategic Asset Location:
Once your portfolio’s asset allocation is determined, we seek to improve its tax-efficiency by optimizing the “asset location”; holding more of the income-producing investments inside of retirement accounts to defer the annual income tax bite, and holding growth-oriented investments in taxable accounts where capital-gains tax rates may be timed and managed. This asset-location strategy also considers taxes upon your future spending and any portfolio transitions. By strategically evaluating the "big picture", we can often add significant value without taking additional risk simply by strategically placing assets where various tax-drags can be reduced.
4 MONITOR & REPORT
Comprehensive, accurate data leads to making more fully-informed choices.
We typically provide consolidated quarterly reports to monitor progress towards meeting your goals, evaluate risk levels, and communicate information with you effectively.
FirsTrust also employs cutting-edge technologies to collect data from all of your investment holdings, wherever they may be held, aggregate it into one centralized management system and provide you with 24/7 access from a single web-dashboard.
Asking the right questions is how we continually review and communicate investment performance through the context of your financial goals.
How is the portfolio tracking against your Target Rate of Return?
Are your income needs being met; any upcoming cash requirements?
Are your priorities still the same or has life thrown you a curve ball?
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