Investment Process/Procedure
1. Define Investment Objectives
- Goals: Determine financial goals (e.g., retirement, buying a house)
- Time Horizon: Decide how long to invest (short-term vs. long-term).
- Risk Tolerance: Complete Risk Assessment - willingness and ability to take on risk.
2. Research and Analysis
- Market Research: Analyze current market trends, economic indicators, and sectors of interest.
- Company Analysis: Review top mutual fund companies for ranking, reputation, length of history, consistency, market niche funds.
- Performance History: Analyze past performance, keeping in mind that past performance is not indicative of future results.
- Fund Manager: Research the experience and track record of the fund manager.
3. Investment Considerations
Asset Allocation: Follow YourLife Investment Philosophy.
- Expense Ratio: Look at management fees and other expenses that will affect returns.
- Mutual Fund Strategy: Understand the fund’s investment strategy and asset allocation.
- Mutual Fund Investment Class: Choose funds that complement the overall portfolio and diversify investments. Work to reduce correlation between funds.
- Compare Funds: Use tools or websites to compare different mutual funds based on performance, fees, and holdings.
4. Monitor and Review
- Performance Tracking: Quarterly review of the models performance against benchmarks and competing models.
- Fund Selection: Consider replacing underperforming funds or diversifying further if needed.
- Market Conditions: Stay informed about changes in the market that could impact investments.
5. Adjust and Rebalance
- Systematic Rebalance: At least semi-annually rebalance each model to maintain your desired risk level.
- Opportunistic Rebalance: During significant market downturn (10% correction or greater) rebalance models to position for potential increase.
6. Document and Learn
- Keep Records: Document investment decisions and outcomes for future reference.
- Reflect: Learn from both successful and unsuccessful investments to improve future decision-making.
- Continuous Learning: Stay informed about market trends and continue education on mutual funds and investing strategies.
This process can be tailored to individual preferences and circumstances, but it provides a solid framework for making informed investment decisions.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.