Investment Objectives: | These are my main objectives for my investment program. I have made developed them after a review of my financial resources, financial goals, asset allocation, risk tolerance and time horizon. * Objective 1: To retire at the age of 57 * Objective 2: To have an annual income from my investments of at least $45,000 after taxes and in today’s dollars (inflation assumed to be 3.0 percent yearly) * Objective 3: To leave a meaningful inheritance for my children * Objective 4: To minimize potential tax liabilities * Objective 5: To monitor portfolio allocation against holding limits, to benchmark returns against expectations, and to consider revisions to portfolio as personal situation may dictate |
Risk Tolerance: | My ability to tolerate the uncertainties, complexities and volatility inherent in the investment markets has been considered in the development of this investment program. The main factors ...view middle of the document...
The portfolio balances risk and reward and attempts to achieve the stated objectives of the investment program. The initial asset allocation is: * Large Cap U.S. Equities (25 percent) * Mid Cap U.S. Equities (10 percent) * Small Cap U.S. Equities (5 percent) * Foreign Equities (15 percent) * REITs (10 percent) * Inter-Term Govt Bonds (25 percent) * Corporate Bonds (5 percent) * Cash Equivalents (5 percent) |
Selection Criteria: | Investment portfolios used to implement the investment program shall be subject to specified selection criteria and shall be monitored for adherence to my investment policy guidelines, major changes in the portfolios and comparative performance with similar investments. The expense ratio and overall cost of funds shall be a major point in the selection criteria. To minimize style drift, index funds are preferred, if available, for all asset class. |
Review Process: | My investment performance will be monitored and reported on a quarterly basis and will be compared against the appropriate benchmarks. The investment program will be reviewed at least annually to make sure that it continues to achieve his stated objectives. Since this investment program is long-term in nature, the periodic adjustments made to his investment program should be small. |
Re-balancing: | The percentage weighting to each asset class within the investment portfolio will vary. The percentage weighting within each asset class will be allowed to vary within a reasonable range of plus or minus an absolute 5 percent or 25 percent of the original allocation amount; whichever is triggered first. To minimize taxable events when re-balancing is required, dividends and net cash inflows will be used to meet the strategic asset allocation targets. If cash flow is not sufficient to meet the target allocation for an asset class, I will decide whether to effect transactions in order to re-balance the asset allocation. |