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The FSFP Approach to Portfolio Design
As financial planners and investment managers, we believe in the following fundamental principles with regard to designing an investment portfolio and making specific recommendations: (1) the purpose of a client’s investment portfolio is to fund current and/or future financial objectives, and (2) the design of the portfolio must take into account the client’s financial objectives, tolerance for risk, and need for current income or liquidity, as well as special considerations such as income and estate taxes.
The important thing to remember is that no one can predict the future. It is difference of opinion that makes a market. Investment and economic "experts" provided with the same information often come to different conclusions. We do not suggest that we, or that any of the mutual fund managers that we recommend, will make the correct decision every time. We do believe, however, that studying the historical trends and relationships of investment classes, as well as the philosophies and approaches of successful investment managers, can provide valuable insight. The appropriate allocation of investment assets according to your goals and risk tolerance is the most important component in developing an investment portfolio. We believe that if clients have diversified, well-balanced portfolios, follow long-term buy-and-hold strategies, and have patience they will be more likely to achieve their long-term financial objectives.
Before we recommend any investment, we consider current economic conditions, the outlook for that asset class or type of security, the proposed investment’s contribution to the overall portfolio, and the client’s objectives and tolerance for risk. As fiduciaries, we strive to recommend the most appropriate investment vehicles to meet our clients’ objectives, but we must also be conscious of investment-related expenses.
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