Investment Philosophy

Goals-Based Investing

People with different levels of resources and financial asset complexities require different investment solutions. But, as humans, we do have certain commonalities. We all have multiple goals and priorities - and we all have a limit to how much risk we can take, which isn’t necessarily constant.  Given these realities, we believe it is wise to treat risk capacity as a scarce resource, create a budget for it, and ‘spend’ it wisely.

Whether the goals are needs, wants, or dreams, from an investment perspective they can be viewed as liabilities that must be funded. What we call goals-based investing for individual investors is known as liability-driven investing (LDI) among institutional investors. Whatever you call it, the point is to use an approach that enables you to manage investments so that you can achieve your goals, both those that are critical and those that are desirable. 

Needs, Wants, Dreams… and Risk

Regardless of a client’s financial resources, when we develop a goals-based investment strategy, our initial objective is to help clients identify, quantify and prioritize their most critical goals.  These are the investment goals that a client really can’t afford to miss on, if at all possible.  Given the importance of these ‘liabilities,’ it’s critical to fund them with a portfolio risk level that isis both highly intentional and highly efficient in terms of the returns it generates for the amount of risk it realizes. In other words, we seek to take care of these goals in a fashion that minimizes the potential for a client to get knocked off track by episodes of extreme market risk and helps avoid the emotional reactions that often follow. For some people, depending on their financial resources and goals, this may represent their entire portfolio.

For other clients, there may be excess capital available to deploy after the priority goals are funded.  This situation creates a very real asset for those investors – one that should be shepherded and spent wisely.  That asset is the luxury of being able to be patient and picky when approaching the decision of why, when and how to ‘spend’ additional risk from the budget.  Custom portfolio solutions are introduced and sequenced for these clients as appropriate.

Whether you need to keep earning to meet long-term goals, or you ‘have enough’ and want to be more opportunistic in your investment approach, selecting a trusted partner for investment advice is an important decision. Our team has the expertise to help you navigate the challenging investment environment:

  • A deep understanding of the complexities, inter-relatedness, and episodic nature of risk and reward in the modern investment landscape
  • A strong understanding of history and the importance of valuations in a multi-asset context
  • An experience set that goes beyond the superficial knowledge required to sell something

It’s Your Family, Your Plan. We are committed to providing the right resources, cost-effectively, so you can achieve your objectives.

Learn about our Insurance Planning Strategy