Grand Wealth Management has developed an Investment Process to ensure that our clients’ portfolios are structured to meet their needs and goals. The process results in a written Investment Plan and Investment Policy Statement, which create a road map for each portfolio based on a client’s unique situation. By following an investment plan, our clients maintain the consistency of their investment program, regardless of short-term market events. It also helps clients avoid costly mistakes as the day-to-day market volatility plays upon their emotions.
While each investor’s situation is unique, investment plans always address certain factors, including the reasons for the investment, the investing horizon and the degree of risk that the investor can comfortably tolerate. The investment plan guides us as we work to achieve our clients’ long-term financial success. Our investment process centers around five steps:
1. Assess goals and circumstances. The investment plan process begins with a discussion of our clients’ financial values and goals, as well as their existing assets, advisors, processes and interest.
2. Set long-term investment objectives. Taking into account the long-term nature of successful investing, we set objectives for our client’s portfolio that are appropriate for their attitude towards risk and investment horizon.
3. Plan the asset allocation. Because it is so important, asset allocation is the first investment decision. During this process, we decide how much of the portfolio to invest in each of the different investment types, or asset classes, including stocks, bonds, and short-term investments, domestic and foreign.
4. Select the investment approach. With an asset allocation in place, we now select the investment vehicles that will be used to implement the portfolio strategy. Two key investment principles guide these decisions: the importance of diversification and the value of remaining invested.
5. Build the portfolio. Building on the first four steps, we construct a portfolio suited to the clients’ needs, goals, investment horizon and risk attitude. The building blocks for the portfolio are institutional asset class funds, an excellent way to implement a diversified portfolio that maximizes the probability of achieving the clients’ goals.
This process embodies the essence of financial planning: assessing a client’s current financial situation, setting goals, developing a strategy to meet the goals, implementing the strategy and regularly reviewing the results. Following an investment process compels you to become more disciplined and systematic, thereby enhancing the probabilities of meeting your investment goals.