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Portfolio Design


Risk tolerance is individually assessed to identify our client’s comfort level with various types and levels of risk/volatility.  Whether a portfolio fits our client’s risk tolerance is often measured by how well they are able to sleep at night.  We periodically revisit our client’s risk tolerance to make sure the risk tolerance of their portfolio is still a good fit.    
 
Investment time horizon is central to assessing an appropriate asset allocation.  Knowing when our clients will use the money from their investment portfolio determines the types and levels of asset classes included.  As a rule, the longer the time horizon, the more aggressive our clients can be as an investor. 
 
Periodic rebalancing is an essential account management tool that helps to keep our client’s portfolio within an appropriate risk tolerance level.  Depending upon the investment services chosen by the client, we will review our client’s portfolio at least bi-monthly for those who have chosen discretionary investment management services or at least annually for those who have chosen non-discretionary investment review services.     
 
Tax consequences are always taken into consideration to mitigate the negative impact of taxes on our client’s portfolio.  We exercise great care in the appropriate selection and placement of investments within our client’s taxable and tax-deferred accounts.  For those clients who come to us with low-basis stock, we develop and implement a disciplined approach to diversifying the portfolio while mitigating the tax consequences.  Even though we normally practice a buy-and-hold strategy versus a market timing approach, there are times when selling and taking losses may be worthwhile.  We will revisit periodically, and particularly before the end of each year, this strategy for our client’s taxable accounts. 
   
Managing withdrawals from our client’s retirement savings is a critical component to portfolio design.   Several factors need to be examined when determining the withdrawal rate, including the portfolio allocation, how long our client expects to withdraw from the portfolio, and our client’s risk tolerance and consumption patterns.


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