Investment Consulting Process

Transcript

1. Investment Consulting Process Raymond Choo, Senior Investment Advisor
2. Step 1: Discovery Step 1: Discovery • To clearly understand the unique needs of our client • Identify and prioritize goals • Save to purchase a home
3. • Achieve a financially secure retirement • Education funding • Provide for the well-being of aging parents • Provide for the well-being of aging parents • To establish a legacy for the next generation
5. Analyze client needs and gain an understanding of the following: – Return requirements, income needs and tax – Return requirements, income needs and tax implications – Tolerance to risk and loss of capital – Time horizon
6. Highest/Lowest Rate of Return for Stocks January 1, 1935 - June 30, 2006 S&P/TSX Composite Total Return 87% 55% 28% 30% 40% 50% 60% 70% 80% 90% Annual Rate of Return Risk Diminishes With Time 28% 20% 14% -39% -22% 6% 13% 3% -9% 9% -40% -30% -20% -10% 0% 10% 20% Annual Rate of Return
7. Step 2: Diversification Step 2: Diversification • Diversification reduces Investment Plan volatility without affecting return • Diversify by geography, asset class and investment management style
8. Asset Allocation - 91.5% 4.6% 1.8% 2.1% Asset Allocation represents 91.5% of the variation of portfolio performance Asset Allocation Asset Allocation Asset Allocation - 91.5% Other Factors - 2.1% Market Timing - 1.8% Security Selection - 4.6% 91.5% Source: Brinson, Singer, Beebower, Financial Analysts Journal 1991
9. Step 3: Investment Policy Statement Step 3: Investment Policy Statement • Summary document used as foundation for client’s investment decisions • Describes the objectives of investment • Describes the objectives of investment strategy, investment guidelines and targets appropriate asset allocation and any investment constraints
11. Step 4: Investment Selection Step 4: Investment Selection • Criteria for selection includes: – Quantitative Analysis: Focus on consistency of returns, value added vs. benchmarks, level of diversification and adherence to investment of diversification and adherence to investment style – Qualitative Analysis: Focus on Investment Manager’s investment philosophy, risk management, proficiency of its people and management, process and code of ethics
12. • Recommend a customized investment strategy that adheres to your Investment Policy Statement Policy Statement – Strategic asset allocation – Multi-dimensional diversification
13. Step 5: Continuous Monitor & Step 5: Continuous Monitor & Review Review • Monitor the events that shape our client’s lives and their financial goals • Study the trends and developments that shape the global investment environment, that drive our economy and ultimately effect your portfolio’s performance
14. Quantitative and qualitative reviews look for signs of potential deterioration in performance – deviation from the investment mandate – deviation from the investment mandate – consistent under performance – departure of key investment personnel from Investment Manager – merger or acquisition
15. Our investment process forms a direct partnership with our clients, the lines of partnership with our clients, the lines of communication are always open
16. Raymond Choo, Senior Investment Advisor 3950 14th Avenue, Suite 106 3950 14th Avenue, Suite 106 Markham, ON L3R 0A9 1-877-RAY-3838 raymond.choo@holliswealth.com.com RayChoo.com
17. This presentation was prepared solely by Raymond Choo who is a registered representative of HollisWealthTM (a division of Scotia Capital Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada). The views and opinions, including any Disclaimer Disclaimer Canada). The views and opinions, including any recommendations, expressed in this presentation are those of Raymond Choo alone and not those of HollisWealth.