JC Financial Planning &
Investments LLC
Our Investment Process:
Asset Allocation is the primary determinant of a portfolio’s return. In 1986, Brinson, Hood and Beebower published the paper “Determination of Portfolio Performance” which concluded that an investor’s portfolio return is determined primarily by asset allocation and only marginally by security selection and/or market timing. To achieve a broad portfolio diversification, we select among 16 different Asset Classes.
We construct portfolios primarily using Exchange Traded Funds (ETFs). ETFs offer investors highly diversified asset class exposure that is transparent, liquid, low cost and tax efficient. Passive security selection means the use of an index based investment product to gain diversified exposure to a desired asset class. For larger portfolios, we may also use individual securities to build portfolios, primarily for equities and bonds. For certain segments of financial markets active management may add value over time - in these segments we may also use Mutual Funds.
We follow a “value based” strategy that intends to overweight investments that look attractively valued on a relative and/or on an absolute basis.
Portfolio Implementation: First, we evaluate the risk tolerance for each client and based on the result, discuss the appropriate asset allocation. Once we agree on the investment strategy, we provide a detailed investment plan.
Monitoring/Rebalancing: Studies have shown that periodically rebalancing between asset classes can significantly reduce the overall risk (also called volatility) of your portfolio. For many investors, this means a smoother ride towards their financial goals. Our client portfolios are regularly reviewed to determine if rebalancing is needed.
We focus on what we can control:
1. Ease of Mind
2. Eliminate Negative Human Behavior
3. Professional Stewardship
4. Personalized Asset Allocation
5. Cost & Tax Efficiency