Investors Trust believes each client has unique preferences and needs from their investment portfolio. This is why the cornerstone of our wealth management approach is to define with our clients their specific investment goals and to document them into an Investment Policy Statement that is aligned with their objectives. We can not underestimate the importance of a well thought-out investment policy for it will detail exactly how their portfolio will be managed, and the methods to be used to achieve their rate of return requirement at the level of risk the client expects and understands. Investment policy is a dynamic document. Policy should be reviewed at least annually and revised as objectives, needs, and circumstances change. Certainly, policy is flexible enough to implement short-term investment strategies consistent with one’s objectives in light of changing capital market conditions.
Investment policy will incorporate specific guidelines along with the overall investment objective. For example, clients may wish for their portfolio to be invested with social conscience and may restrict or emphasize certain types of investments. There may exist other unique preferences, and it is incumbent upon us to document these in the policy statement to ensure the portfolio is always compliant with these requests.
Our investment policy statements will incorporate the following:
The investment objective includes an overall mission statement describing the long-term goals and purpose of the portfolio. It will include a rate of return requirement along with the amount and type of investment income the portfolio will deliver.
Perhaps the most important decision to make in the investment equation is the optimal mix of investments that is consistent with the overall investment objective. The proper allocation of assets in the portfolio will determine investment risk and influence the long term return for the portfolio.
The length of time that one has to invest will influence the rate of return requirement and the risk level to be assumed. Investors that have a longer time frame in which to invest are usually able to assume a higher degree of investment risk and will typically have a higher allocation to growth oriented investments. Conversely, those with shorter time frames will have a lower risk portfolio profile and will emphasize more secure, income oriented investments.
Maintenance of liquid investments is always defined in order to have funds available for unexpected needs that can arise. These expenses can be medical, college tuition, or other unexpected life events that occur.
In seeking to enhance portfolio rates of return, Investors Trust strives to maximize after-tax returns so the tax burden of our clients can be minimized to the greatest extent possible. Tax-efficient portfolio management requires diligent monitoring of the consequences of each investment decision along with awareness of long-and-short-term strategy. For example, when an investment is sold can make the difference between paying the higher taxes associated with a short-term gain or the more modest tax rate of a long-term gain. And, when there are gains it is incumbent upon us to look for ways in which to offset them with potential losses. This is called tax harvesting and is a core discipline of our investment decision-making.
Investors Trust believes it is critical that clients know how their portfolio is performing in light of their overall investment policy. We employ a third-party investment performance and reporting provider who will create quarterly reports detailing your accounts rate of return. This independent measurement service is a part of our overall service and offers objective and unbiased results of your portfolio.