At Milestone, we believe that no two investors are alike. Imagine trying to lump a 60-year-old, sedentary senior with a 20-year-old athlete into the same fitness program. It just will not work. Much like this analogy, it is critical that your investment management strategy is tailored to meet your individual financial goals.  Once your financial goals are identified, it’s time time to assess the rest of your needs, including:  

risk tolerance: how comfortable are you with risk within the investment landscape?
time horizon: takes into account your income needs and desired risk exposure, assists in helping us determine which investments are best for you.
tax situation: paying more taxes now could pay off down the line.
cash requirements: your income needs for retirement and what you will need to commit now to make it happen.

Additionally, we will need to assess the rate of return required to accomplish these goals. We find that all too often, people are consumed with high risk investments that are not in line with their ultimate financial goals. Other times, we see exactly the opposite.

In the latter case, people are positioned so conservatively that their portfolio won’t even keep up with inflation, which then causes the loss of purchasing power.

Bottom line, it’s critical that your investment strategies are in line with your objectives.

Another key part of the process is what we call a stress test. Don’t panic! We won’t be putting you on a treadmill to test your heart performance while we hurl interest rates at you! We are talking about stress-testing your portfolio through a variety of different scenarios in order to understand how your portfolio will respond to various economic events or stressors.

In other words, we want to find out how financially healthy your portfolio really is. This assessment helps us see if there are any concerns, and tells us what adjustments might be needed.

Our ultimate goal is to maximize your investment returns using a disciplined investment philosophy combined with careful risk management.

So here are few items to ponder:

If you lost money in the market at any time over the last several years, you need to ask yourself … will your portfolio be able to withstand another market downturn?

And more importantly, how do you feel about the potential risk?

The answer to the next two questions can help us understand your comfort level with regard to market risk:

What would change if your portfolio experienced a significant gain? (significant meaning 30% – 50% or thereabouts)

Some people say that they would probably take more vacations with the family, maybe spend a little more on luxury items or just revel in that extra security. In this case, nothing for them will change too much.

What would change if you had a more or less equivalent loss in your investment portfolio?

The same people expressed that they would be ruined financially, perhaps having to downsize their home, or some other life-altering change.

The answer to the second question is the main reason that the wealthy are more concerned with preserving what they already have, rather than pursuing a risky investment with a potentially high return.

Milestone Wealth Investment Planning

Milestone Wealth is in the business of helping you protect and grow your money. Using strategies that are tailored to your unique needs, we are all about helping you reach your financial goals so that you can look forward to a happy, healthy and prosperous future.