
Courtesy of Capital Bank
By Peter Capozzola, CFA
At our house, I stay away from any projects having anything to do with electricity; or anything that can result in a flooded basement or in a tree crashing through our roof. Sure, I can look up a YouTube video for advice, but for me DIY has its limits. I’m better off hiring someone who has the professional experience and skills in these fields and is hard wired in ways I am not.
When it comes to investing, people can take the DIY approach and even find tutorials on YouTube (you may want to skip past the “Roaring Kitty” GameStop Meme). Beyond that, the advice offered can be like pieces of a puzzle; incomplete, and from which it is impossible to grasp the full picture. Worse, the information may simply not be applicable to your goals and circumstances, so it is not the solid foundation on which you would want and need to build a plan for your future.
Managing investments is what an investment manager does day-in day-out, year-in year-out. It is a profession they are committed to, and this is how they are hard wired. To us, the keys are an informed approach; executing a disciplined process; having the right people on our team; and focusing on capital preservation by striking a balance between risk and reward and seeking a margin of safety when investing.
There are five key elements to a successful client-advisor partnership: an informed plan; an appropriate strategic asset allocation; opportunistic tactical allocation, diversification, and ongoing communication with clients.
What informs an investment plan is not so much the markets or numbers, but what matters to you. Any discussion should include a review of your cash needs, time horizon, tolerance for risk, investment return goal, tax impacts and your unique circumstances. Each of these factors should be considered when determining an appropriate investment path for you.
That investment path begins with a “strategic allocation” that lays out the appropriate mix of cash, bonds and stocks, taking into account the historical returns and risks of the markets over the long run, which is suited to meet your particular goals. Keep in mind that as your circumstances change, your investment path and strategic allocation will likely change as well.





