The first step in developing an individual client portfolio is to establish the short and long-term financial objectives of the client and determine a solid risk tolerance. A thorough understanding of these parameters enables Smith Associates to develop the investment mix best suited to achieve client goals.
We work closely with the client to identify risk tolerance as best we can. This will include reviews and discussions of, as previously mentioned, both short and long-term financial objectives; and, will begin with a review of the clients’ current financial expenditures, tax status, income sources, and assets, debt obligations, and liabilities.
We will also review several non-financial considerations, such as age, marital status, investment experience and attitudes, employment stability, educational and healthcare needs, and more.
After determining objectives and risk tolerance the proper asset allocation may then be determined. Smith Associates takes a macroeconomic outlook and integrates it into a microeconomic strategy, for the development of a proper asset allocation model. We consider where we are in the current economic cycle and look forward 12 to 18 months. Then, taking into consideration the objectives and risk tolerance of the client, we invest in those products that, in our judgment, will provide the best performance consistent with the client’s goals and preferences.