A good investment portfolio begins with the right amount of risk. There are three major classes of investments which all carry with it different levels of risk. They include:

Stocks – Business ownership; most risk; highest long-term returns.

Bonds – Fixed income or debt investments; lower risk; lower long-term returns.

Cash – Short term debt investments; lowest risk; lowest long-term returns

Generally, you will use a combination of investment classes to meet each investment objective. If you are saving for retirement which is a long ways out, you will generally use a higher amount of stocks to obtain greater long-term growth. If you need the money in a year, you would use cash to minimize risk. Developing an asset allocation strategy is simply distributing your portfolio appropriately among each investment class.

We will guide you in developing an asset allocation strategy before we ever make an investment recommendation. We create this strategy as a part of your investment policy statement.

An investment policy statement is the customized roadmap that clearly states the goals and objectives of your portfolio. It includes pertinent information and assumptions, such as your investment timeframe, tolerance for risk, and target return rates. It also describes your asset allocation strategy including the target percentage of stocks, bond, and cash that will be used to reach your goals.

We will guide you through the process of creating this policy statement, which will provide us a clear roadmap to follow in managing your account and you a clear understanding of what to expect.

Please view the document below to view an example of this critical roadmap for success.

Investment Policy Statement Example
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