How We Analyze Your Investments

How We Analyze Your Investments

May 08, 2023

While the field of comprehensive financial planning has come a long way from only managing a person's investment portfolio, we still see this as a keystone part of our services to clients. One of the ways we do this is through periodic reviews of clients' overall investment pictures, and recommending shifts based on a list of factors that we take into consideration. 

When analyzing investments, we use a range of criteria including:

  • Ensuring we are spreading risk and investment return opportunity by diversifying your investments across a wide range of stocks, bonds, and cash. This is referred to as “asset allocation.”
    • This includes diversifying your investments across the universe of US and international stocks from very large to very small companies both in the developed world (e.g., Canada and Europe) and emerging markets (for example, India and China).
    • And also includes further diversifying your investments to include a range of bonds such as treasury bonds and other government and corporate bonds as well as cash to reduce the risk of your portfolio from stock market downturns.
  • Minimizing trading fees, selecting investments with low annual fees, and being mindful of the taxable implications of trades and different types of investments.
  • Using well regarded investment companies and selecting high quality funds based on our research.
  • Making investment choices based on the type of account (for example tax-free Roth IRA accounts typically are the last money that we recommend our clients use and therefore these have the highest percentage of stocks in them compared to your emergency fund and short-term monies which we prefer to be in cash). This is referred to as “asset location.”
  • Crafting your overall portfolio to be consistent with your comfort with investment risk, your capacity for risk (in other words how much can you afford to lose in the short term when things get unpleasant), and your actual need for risk (how much additional growth do your investments need year over year to fund your life).
  • Factoring in your time horizons and goals for each “bucket” of funds to ensure that your short-term money is ready when you need it while your longer-term money is poised for growth.

Reviewing and analyzing your investments at least annually allows us to account for changes in your goals or life circumstances, shifts in the market, legislative changes, and anything else that life throws at us. 

If you have any questions on your portfolio or how we analyze and recommend changes, schedule a 30-minute call with Debbie.