Wealth Management

At Financial Foundations, we take a holistic approach to our wealth management services. Our process begins by creating a personal financial plan: your blueprint for future success. Understanding where you are today and where you need to be in the future allows us to identify two critical goals:

  1. Your Wealth Accumulation Target (WAT): this is based on your Personal Financial Plan (the WAT is the amount of wealth necessary to enjoy a successful retirement)
  2. Your Portfolio Return Requirement: this is the rate of return necessary in order to generate the income you need during retirement and to ultimately transfer your wealth to the next generation, all while keeping pace with inflation.

As such, we manage our model portfolios with these two objectives in mind.  Additionally, we manage your portfolio based on the tax consequences inherent with the type of saving, (qualified (IRAs) and non-qualified (Brokerage-Taxable)).

Once we establish the portfolio objectives, we select the right asset allocation model.  Our goal in managing your portfolio is to help manage the risks intrinsic in investing.

The process has four parts:

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Diversification

We determine how much wealth you must accumulate to satisfy your long-term cash flow needs during retirement by conducting a retirement plan projection. The return you require from your portfolio is determined by evaluating the existing portfolio's value, inflation, the age of retirement, and how much income you will need to maintain or enhance your current standard of living. Once we have made this assessment, we can determine how to allocate the assets among four classes; stocks, bonds, REITs, and cash. Diversification does not ensure a profit or protect against a loss in declining markets.

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Asset Quality

Once we have adopted the right asset allocation model, we choose high-quality investments that have proven their ability to deliver. We look for above-average peer group performance with below-average benchmark volatility. Past performance is no guarantee of future results.

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Portfolio Construction

Dollar cost averaging is the process that allocates a certain percentage of the portfolio into the desired allocation over a pre-determined time frame.  Additionally, it allows us to pick and choose which assets to purchase based on prevailing market conditions.

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Portfolio Re-balancing

There are 3 elements to our portfolio rebalancing process:

1. Asset Quality: When an asset you own no longer exhibits the characteristics we identified for its original selection, it is replaced.

2. Asset allocation: No doubt each of the assets you own will perform differently over time. Therefore, we will need to re-balance the portfolio by selling our over weighted positions and buying our underweighted positions.

3. Tactical/Strategic Allocation Shifts: We are forecasting our future expectations and look to add on strategic asset classes that we believe will have a positive influence over the portfolio's risk characteristics and performance.