Commonwealth Financial Network® is one of the most respected independent Registered Investment Adviser firms in the financial services industry and allows us to have our own individual and independent practice without any proprietary products. Our investment asset management is offered through Commonwealth and they provide us with independent research, state-of-the-art technology, a variety of account structures, and extraordinary support in numerous client service areas. Our relationship with Commonwealth is a valuable asset and an important tool for our practice.
Our access to state-of-the-art independent research at Commonwealth helps
evaluate current and future portfolio positions.
Your investments are a tool, and before recommending or buying an investment, we work with you to establish goals for those investments. This enables us to lay the groundwork for a buy-and-sell and, in instances, a buy-and-hold discipline designed to guard against dramatic consequences to your investment portfolios.
We believe asset allocation is a critical element in any sound investment plan.
Asset allocation is the process of dividing your investment dollars among a variety of complementary asset classes, such as equities, fixed income, and short-term, highly liquid vehicles—including money market funds—so that your portfolio is well diversified.
Key benefits of a sound asset allocation strategy include reduced risk, more consistent returns, and a greater focus on long-term goals. In fact, proponents of asset allocation say that this practice is designed to achieve higher risk-adjusted returns over time.
By building a portfolio that encompasses a broad range of asset classes and investment styles, you can help protect your portfolio from sudden changes in the financial markets. A diversified solution can potentially help you attain your long-term goals more readily—and with additional peace of mind.
There can be no guarantee that any particular yield or return will be achieved from any investment, nor is there a guarantee that a diversified portfolio will outperform a non-diversified portfolio. Investors should note that diversification does not assure against market loss.
A change in your goals, time horizon, risk tolerance, or personal financial situation may require a change in your strategic asset allocation, which is why it’s important to periodically review your asset allocation strategy. For example, as your time horizon shortens, you may have less time to recoup losses from sudden market downturns. Therefore, you might consider a more conservative asset mix.
In contrast, investors whose financial situation has improved significantly or who have become more comfortable and experienced with more volatile assets, such as equities, might shift to a more aggressive allocation strategy.
Fluctuations in the financial markets may also necessitate a reassessment of your portfolio. For example, if you begin an investment program with 75 percent of your investments in equities, 20 percent in fixed income, and 5 percent in money market funds, several years of strong fixed income or equity market performance could quickly shift your allocations. The resulting, unplanned overexposure—or, in negative conditions, underexposure—to an asset class may not be in keeping with your risk tolerance, investment goals, and time horizon.
We encourage maintaining ongoing communication with us to periodically rebalance your portfolio. In this way, we can help ensure that your investment plan remains consistent with your goals. We establish a fixed allocation with a goal for the funds in mind, but we build into the plan enough flexibility to seize opportunities along the way.