Using either a questionnaire or your investment experience as a guide we determine the best investment solution that would help you achieve whatever goal you have in mind. These questionnaires are fairly standard in the industry and help you determine an optimal risk / return strategy; however the best strategy is the one that gets you to where you want to go.

For investment purposes, assets are classified as cash, debt and equity. Asset allocation refers to the distribution of investment dollars between these three classes. Combining these asset classes is called diversification and is widely believed to be the most important contributor to your investment returns.

Given the almost infinite number of combinations that can be generated, computer programs have been utilized to analyze data and compute optimal or efficient portfolios for various risk return scenarios.

 

Savings Accounts: Used for short term saving and purchases that are to be made in 1 - 2 years and generally earn little or no interest unless a minimum balance is maintained. ING ** has a savings account that earns good interest and does not require a minimum balance; in addition they do not charge fees. ING accounts are covered by CDIC.

GICs: Covered by the CDIC and earn very little interest. These are used by investors who are very risk averse and may or may not require the funds in the short term; however they are prepared to sacrifice better returns for the guarantee.

Mutual Funds: Good investment alternative for most investors seeking better returns, have longer time horizons and can accept some degree of volatility. Mutual funds are not covered by the CDIC. I have identified five fund families that offer a range of funds that when combined would offer the degree of diversification required by investors ranging from very conservative to very aggressive in nature.

Fund of Funds: Most mutual fund companies offer a grouping of funds that they have positioned to reflect investors tolerance for risk from very conservative to very aggressive, they go further with rebalancing and good reporting as well.

Managed Money: Using offerings from three major fund companies I help clients identify which managed money program would suit them the best. These programs use investment managers from outside and often include managers from competing fund companies because of the added diversification they would bring to the table. Reporting for these types of programs is very good with quarterly statements that show a great deal of detail.

Private Client: These programs are offered by a few fund companies and go the extra mile with personal investment portfolios including *stocks, *bonds and cash as well as estate planning services and face to face meetings with managers. The reporting for these programs is the most detailed and clients have input at each stage of development.

Conclusion

Whether you are saving for retirement or a new fridge the strategy you employ should be suitable to the purpose and time frame. Obviously you wouldn't purchase a risky mutual fund on a deferred load basis if you needed the money to buy a fridge within a year. The same is true of saving for retirement, you should not use a short term savings vehicle with low rates of return when you have several years to go before needing to draw on the portfolio.

I can help you establish an efficient portfolio, calculate how the portfolio is to be funded and monitor it with annual reviews.

* “I am not licensed to offer advice on individual stocks or bonds.”

** ING Bank accounts and Private Client programs are offered through referral arrangements between ING and FundEX Investments Inc.

 

Top

Home | About | Financial Planning | Investment Strategy | Risk Management | Estate Planning | Continuing Education
Fee Schedule | Financial Calculators | Links | Disclaimer | Privacy | Contact | Client Login