Investment management begins with identifying one’s financial goals, and then developing a plan to pursue those goals. In doing so, it also involves evaluating their investments. In short, if one were to obtain a high rate of return, their portfolio could provide remarkable growth over time. However, if you want a high rate of return, you need to be prepared to take a lot of risk. Conversely, if you want little to no risk, then you probably won’t get very much for a rate of return. Well, most people are somewhere in the middle. It is important to note that the single largest component of risk is time horizon. If you don't need the money for decades, then you potentially can afford to take risk. However, if you need the money in less than a year or two, then it may be prudent to take much risk.
At Menninger & Associates, our investment planning philosophies and processes include the following:
- FIDUCIARY - We are fiduciaries for our advisory clients, which means we place our clients’ needs ahead of our own.
- DIVERSIFICATION - We invest primarily in Mutual Funds and Exchange Traded Funds (ETFs) and recognize that diversification can play an important role in addressing risk.
- CUSTOMIZATION - We customize each client's portfolios to match their goals, risk tolerance and income needs.
- ACTIVE MANAGEMENT - We make tactical adjustments to investment portfolios when appropriate, as we continuously research and monitor economic conditions. By making tactical portfolio changes, we attempt to stay ahead of swift market movements.
- RESEARCH - We make consensus, research-driven investment decisions via our Investment Committee.
- PRESERVATION - We generally invest more conservatively, willing to give up some upside to potentially preserving principal on the downside.
- TAX-AWARE - We carefully incorporate tax planning strategies into our portfolio construction and updates.
- TIME HORIZON - We believe that time is the single largest component of risk such that shorter time horizons will have lower risk than longer time horizons.
- LONG-TERM - We are long-term investors who take a strategic asset allocation approach designed to pursue the goals in each client’s financial plan.
- MONITORING - We conduct ongoing due diligence to ensure the investments we use perform as expected.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.
Tactical allocation may involve more frequent buying and selling of assets and will tend to generate higher transaction cost. Investors should consider the tax consequences of moving positions more frequently.
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Menninger & Associates, LPL Financial, nor any of its representatives may give legal or tax advice.