In order to determine the most appropriate investment approach for your individual needs, we follow a five-step investment management process. This process assures that Barnstone Advisors will gain an understanding of your full financial situation and be able to provide you with a financial plan that not only meets your needs, but also one that you will understand. Your plan will evolve as you evolve, so it is on going process that we constantly monitor. Rollover each step of the process for a brief description.
Analyze Current Position
This first step in the process is critical as it used as the foundation for all the subsequent decisions regarding the investment program we design for you. We will review and analyze your unique investment and planning objectives, goals and needs, your investment horizon and your tolerance for risk, keeping in mind the constantly changing tax, regulatory and financial environments. We make sure to account for and accommodate any financial, legal, or social constraints. All of the information we gather from you in this first step will allow us to design an investment plan and construct a portfolio that will uniquely fit your individual circumstances.
The next step in the process is to create an allocation plan that will address your specific goals and objectives. Using variables such as risk tolerance, asset class preference, time horizon, and expected returns, we will allocate your portfolio to carefully selected asset classes and sub-classes within our models. Our models are constructed on the basis of expectations of future outlooks for broad asset classes, including a mix of expected returns, risks, and correlations of classes. Our analysis will help us determine the optimal asset allocation strategy to put in place to provide us the highest probability of reaching your goals.
Formulate Investment Policy
The third step is arguably the most important in the process. The creation of an investment policy statement (IPS) puts in writing all of the steps of the process and enables all parties involved in the managing of a portfolio to work from a common document. The IPS covers six elements, including purpose and background, statement of objectives, guidelines and investment policy, securities guidelines, selection of money managers, and control procedures. The IPS is similar to a set of blueprints for a house.
In this step of the process, we select the optimal funds for each asset class and investment style. To maximize our objectivity and keep the focus on your unique needs, we follow a due-diligence process for selecting and monitoring investment options. We evaluate both quantitative and qualitative factors in our multi-step approach of analyzing candidates for your portfolio.
Monitor & Supervise
We are constantly monitoring your portfolio and provide reports monitoring the progress of your investment program on a quarterly basis. We provide you with reports that address your portfolio performance based on the target allocation as compared to appropriate benchmarks, the needs, if any, for rebalancing or changes in target allocation, and whether the objectives outlined in the IPS are being met. We will help you understand why the performance results were achieved and to identify any adjustments that may need to be made.