How much risk, or volatility, is the client willing to accept in the portfolio?
The foundation of every individual portfolio will be laid by utilizing the specific answers each client has to these three questions. Once we have a strong hold on the goal, timeframe and risk parameters of the portfolio, we can then begin to move into the development of the diversification and investment selection strategy. Our investment philosophy is as follows: Every portfolio should be comprised of the appropriate mix of cash, fixed-income securities and individual common stocks, mutual funds or exchange traded funds (ETF’s) that invest in common stocks. To begin we will recommend setting aside an emergency cash reserve fund for any liquidity needs that may be required over the next 3 to 12 months. A money market fund or other cash equivalent would be appropriate to fund this reserve. Next we recommend purchasing the appropriate amount of fixed income securities to either cover your income needs over the next 7-10 years or to provide a safety anchor to a growth portfolio. Based on
