#10 If You Can't Sleep At Night, You Aren't Doing It Right
At Mawer Investment Management Ltd, we understand the importance of selecting the right mix of assets for each of our clients. That's why we take the time to get to know them a little better.
Before we do any investing, we go through a series of questions. The answers to these questions help us to formulate the client's Investment Policy Statement. The Investment Policy Statement is extremely important. It is like a road map that guides the portfolio manager on the right track to achieving the client's investment objectives, and meeting their needs. It ensures that the client and manager are on the same page.
A few of the items that portfolio managers will discuss with their clients are:
Their objectives: What is the money for - retirement? To provide a source of current income? To buy a car in two years?
Risk tolerance: Do market fluctuations make you nervous? Are you concerned about preserving your capital? Do you like to take risks, or are you a very cautious person?
Time horizon: Will you need to use these funds in the next 2, 5, 10, or 20 years?
Answers to these questions give the portfolio manager a pretty good idea of what the client expects to achieve, and over what time frame they hope to achieve it. The portfolio manager and client can then work together to set realistic goals, given the client's comfort level (risk tolerance), time horizon, and any special circumstances that may affect their investment strategy. Using the Investment Policy Statement as a guide, the portfolio manager then creates a portfolio that is best suited to meet the client's needs and achieve their objectives. Over time, as the client's investment horizon shortens, and their circumstances change, this document is amended, and the investment portfolio is adjusted to suit their new circumstances.
Our clients sleep better at night knowing that their portfolio manager took the time to develop an understanding of their situation, their goals and objectives, their comfort level, and is managing their money according to these guidelines.
If you would like to learn more about how we manage money, please contact our office toll-free at (888) 549-6248, and ask to speak to a Portfolio Manager, or email us for an information package.