It Starts with Your Objectives
Your financial advisor works closely with you to select or create a model best suited to your needs, goals and risk tolerance.
Asset allocation – the way your money is spread among equity, fixed-income and cash investments – is a critical component of investing. In fact, studies have shown that your asset allocation is the key factor in how your portfolio's performance varies over time.
Our professionals create models with broad asset allocation across numerous asset classes and investment styles. For each model, they assemble those investments in proportions designed to work towards the model's specific portfolio objective.
*Asset allocation does not ensure a profit or protect against a loss.
Creating Advisory Solutions models begins with choosing investments for our program. Our research analysts use a rigorous process to identify quality investments that have the potential to help you achieve your long-term goals. The process is based on our Investment Policy Committee's guidance and includes an evaluation of numerous factors, including:
- People — The research professionals who manage the fund
- Process — Their investment process
- Portfolio — Holdings and key characteristics
- Performance — The investments' historical performance
Your specific portfolio objective is based on your life stage and risk tolerance.
For example, if you're younger and saving for your future retirement, you want your savings to grow, and you have more time to recover from potential market volatility. A more growth-focused objective may be appropriate for your portfolio.
If you're retired and relying on your investments to provide for your day-to-day needs, however, preserving your principal and minimizing volatility are more important. An income-focused objective may be more appropriate for your portfolio.
Working with your financial advisor, you can choose a Research Model or build a custom model designed to achieve your portfolio objective. You and your financial advisor will review your portfolio objective regularly and can change it if needed.
Once you set up your asset allocation, it's important to stick with it. We believe that's one of the best ways to work toward your goals. But over time, as investment values change, your allocation can become out of balance. Accounts are rebalanced to bring them back into alignment within original parameters.
A Disciplined Approach
Maintaining your long-term focus can be difficult. Most investors don't set out to make emotional decisions, but it happens all the time. Many leave the market during difficult times, which could lead to missed opportunities. Your financial advisor can help during these emotional times.