We all have a reason for investing. We save some of our hard earned $$ and put them to work, trying to stay ahead of inflation. We all have goals as to what we intend for that money and when: home ownership, education, vacation, future income (when there is no longer enough employment income) and perhaps to pass on to our loved ones and / or charities when our time is up on this planet.
We may have some goals in common, we may not. Our consumption (lifestyle) costs, where we live and our timelines for those goals are likely to be quite different.
Which means that portfolio strategies need to consider all the aspects of each of our individual objectives.
The only way to determine the direction for a portfolio strategy is to first set up a road map that defines the path that this journey will take (at least at the start):
From our Voluntary Code of Conduct for the Stewardship of Your Wealth
We will always:
We call this plan a Wealth Forecast.
It accomplishes a couple of key things:
1) It allows us to set a benchmark for actual dollar amounts (semi annually / annually) to compare to your actual portfolio growth (and other asset growth that you may have). If we are ahead of target, so much the better. If we are behind target, we make the appropriate adjustments to get back on target.
2) It becomes a planning tool for you: if you decide to add a new goal, we can create a new scenario to visualize how this will impact your net worth into the future and prior to making any decisions, give you some idea as to whether or not it makes financial sense: a powerful decision making tool for you to utilize.
It is part of the client service package and comes with the fee that you pay.
In fact, for prospective clients, we prepare the initial forecast without any obligation from you at all. If you like how we structure your strategy as a result and we are a good mix, excellent!
The Wealth Forecast, however is not very useful once you have moved a few months into the future: life is dynamic and everything in the Wealth Forecast will change over time. It needs to be monitored, assessed and adjusted accordingly (and so perhaps will your investment strategy).
Want to try out the process? (click the link)
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist