Investment management is a three-step process:
Determine Your Asset Allocation Plan
We determine your asset allocation plan based upon three factors: your risk tolerance, your age, and indications from your financial plan regarding the appropriate risk level required to achieve your goals. Generally, the financial plan has the most influence, because it objectively demonstrates why a particular portfolio allocation is the right one.
The completed financial plan lays out the percentages of your investments to allocate to various markets that offer different return and risk profiles, from higher reward investments, such as domestic growth stocks, to safer vehicles, such as government bonds. The intent is to build a diverse portfolio that reflects the ideal return-to-risk ratio that supports your long-term goals.
Fill Your Asset Allocations
We use Morningstar and other research data to select high-quality investments to fulfill the selected allocation. Then we make your investments with Charles Schwab & Co., Inc., our custodian of choice, which provides a comprehensive set of global investment options. We earn no commission on investment transactions, so Charles Schwab has no influence on our investment decisions.
As a general rule, we invest no more than 10 percent of your assets in any one fund, typically resulting in a portfolio consisting of about 15 low-cost exchange traded funds or mutual funds.
Track Your Performance
With your investments in place, we track their performance, measuring them against industry averages. Should performance lag, we will move your investment to better performing funds within the same category, keeping it consistent with your asset allocation plan. We also adjust your investments in response to changes in circumstance, such as tax laws and inflation rates, or to rebalance funds that grow at different rates.
We meet with you regularly, typically quarterly or biannually to review your investment results and financial plan and make any necessary adjustments.
At our meetings, you’ll receive written reports on your investments, including:
- A written summary of key performance metrics and recommendations for adjusting the portfolio.
- A comprehensive memo outlining all of your financial plan’s planning assumptions and inputs, what-if scenarios, results and recommendations, delivered annually.
- An “Advisor Fee” memo explaining Highland Wealth Advisory billing.