| If
you are the average investor, you have some money in the company
401k, a few mutual fund accounts, an account with a broker downtown
and a couple of bank accounts. Maybe you have an annuity, a
life insurance policy or two and a few IRA’s at different
banks. Oh yes, and there are those stocks you inherited that
are on dividend re-investment, …where are those certificates….?
Sound
familiar?
Here’s
the worst part, many times you don’t even remember why
you invested in XYZ fund or bought ABC stock. - “Oh
yeah, that internet fund, it will come back eventually won’t
it?” or “We opened the accounts at that new bank
when they were giving away free toasters…” or
“My brother-in-law sold me that annuity his first week
at that insurance company, …what’s their name?
The ones that got bought out by so n’so – Hancock?
no –Aetna? nah, it’s the guys with the big deer
for a logo. Anyway, he’s selling shoes at the mall now…”
Sound
familiar?
Don’t
be concerned. Many investors, MANY, MANY investors are the
same way. It seems like they open an account with everybody
and don’t remember why. There is usually no plan or
strategy except to buy whatever seemed appropriate (read:
hot) at the time.
Here’s
the good news - you’ve been investing! This is better
than having blown your money gambling or some other foolish
endeavor. So you’ve got investments in various locations;
Great! - this shows you’ve been working to try to get
the best return on your money.
Here’s
the next bit of good news; if you are in this section of the
website, you probably have enough assets that it is time to
consolidate and put together a coherent strategy. You are
in need of professional help!
I
cannot tell you the number of times we have reviewed an investor’s
assets for them and they were shocked at how much they were
worth. This is because if you have $10,000 here and $15,000
there, you don’t get a sense of how much it all is.
(If you are one of the smart few that tracks their various
investments in one place online, good for you. You are well
on your way to organizing your finances.)
The
first thing we like to do is get a complete list of an investor’s
financial assets. We then get a list of their real assets.
We also like to know how assets are titled for estate planning
purposes. Once we have this information, we tear apart the
portfolios (on paper) and rearrange them according to investment
classes. We are then able to create pie charts showing exactly
what the overall asset allocation looks like from a number
of perspectives.
We
then take it a step further. Since no industry software would
give us the types of risk and return projections we thought
were realistic, (Most software we looked at gave only positive
projections for all asset classes, there were no negative
possibilities.) we had to invent our own. We came up with
the Asset Allocation/Risk Review. What this does for people
is give them, in real dollars, according to their own asset
allocation, the potential upside and downside for their overall
portfolio over a 1 and 3 to 5 year projection.
The
most important part of consolidating assets is getting a focused
investment plan. When an investor comes to Cornerstone, he
is hiring a coach for his portfolio. We are going to run the
money with one vision. There won’t be an mixed assortment
of investments at various firms anymore.
A
Cornerstone portfolio is built like a football team with each
piece having a specific role to play. And our portfolios are
built to “lean” on other parts of the portfolio.
When this part does this, we expect the other part to do that.
We also don’t expect every part of the portfolio to
be a wide receiver or running back. A good football team needs
good offensive linemen. These are the positions that don’t
have a lot of glamour, but you are glad they are there when
you need them.
Some
people can wander aimlessly down a road and eventually get
to their destination. Most everyone else needs to have a map
and stick to the roads, knowing where to turn and when. This
is what Cornerstone brings to clients. A clear picture of
what’s ahead and how we are going to navigate it.
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