It's our job as investment advisors to design a portfolio that is properly diversified, that takes into consideration your risk tolerance and return objectives.
We look at historical data to construct the framework of your portfolio, which tells us which assets classes to own and how much to own in each asset class. This gives us a good compass heading, but the compass doesn't fly the plane, the pilot flies the plane.
The historical data guides our directional heading but doesn't take into consideration the conditions that exist today and certainly doesn't take into consideration your specific needs or concerns, such as your time horizon, risk tolerance, retirement goals, and spending needs.
All this goes into to designing a portfolio that specifically suits you. But our work is not done after we design your portfolio because it's based on the information we have at the time.
We know markets will change and so may the circumstances in your life. We don't believe in “set it and forget it.” We don't tell you to stay the course no matter what's happening in the world.
We monitor every asset you are invested in, and if we see indications that your money is no longer secure in a certain segment of the market, and we believe that the trend will continue, we are going to adjust.
When times are good, we believe that our clients should get their fair share of whatever returns the financial markets offer. But when times are bad, we don't think our clients should feel their only option is to weather the storm.
Pilot Portfolios are not a guarantee against losing money, but a way to be more nimble than staying fully invested in all market conditions as is typically the case with most mutual funds and other investment philosophies that have the restrictions of double handcuffs.
If you are interested in learning more about Pilot Portfolios relative to your financial plan, please contact us.
It's interesting – planning your future isn't that dissimilar from planning a great vacation. The first step is figuring out where you want to go!
The second is setting the proper course heading to get yourself there. Of course, you wouldn't fly on a plane without a pilot – who would be there to make sure you continue on the right path to reach your destination?
The third step is all about knowing when to adjust. If your situation shifts or the economy changes, your plan should be nimble! After all, your life isn't static, so why should your plan be?