AT NO TIME WILL BARNETT FINANCIAL PLANNING HAVE CUSTODY OF THE FUNDS. ALL FUNDS ARE
HELD IN THE CLIENT'S NAME AT AN OUTSIDE BROKERAGE COMPANY.
ASSET MANAGEMENT SERVICES
In general, there are only three ways to invest money: (1) security
selection; (2) market-timing; and (3) asset-allocation. “Security
selection” involves investing in specific stocks or funds with the intention of
making a profit when the securities go up in price. Market timing involves
being in the market when it is going up, and getting out before it starts
going down. Asset-allocation involves owning a diversified portfolio of all
asset classes at all times, and rebalancing back to the target weightings at
fixed intervals. Numerous studies have repeatedly shown that over 90% of
a portfolio’s long-term return is due to asset-allocation, not security
selection or market timing. At Barnett Financial Planning, we only use
asset-allocation as our investment strategy.
At the beginning of the client-planner relationship, client goals
are written down. A risk-tolerance survey is done, and an
Investment Policy Statement (IPS) is formulated. The IPS
is a written “game-plan” of how the assets are to be invested.
Once the IPS is agreed upon, the investment strategy remains
constant until there are changes in the client’s life situation, at
which point a new IPS is developed to more closely align with
the new circumstances. Having confidence in the IPS allows
both the client and planner to ignore the day-to-day “noise” of
ASSET ALLOCATION METHODS
After the client agrees to the Investment Policy Statement, the portfolio is designed and weightings are assigned to each asset class.
Examples of asset classes are CASH EQUIVALENTS (money-market funds, CD’s, treasury bills, etc.); BONDS (government,
corporate, Ginnie-Mae, high-yield, inflation-protected, etc.); STOCKS (domestic or foreign, growth or value, small-cap or large-cap,
etc.); and TANGIBLES (real estate, commodities, energy, precious metals, etc.). At pre-set time intervals, the portfolio is analyzed
and rebalanced, bringing the current weightings back to the original target weightings.
Barnett Financial Planning offers ongoing asset
management services in addition to financial
planning. For those clients who would prefer not to
manage their own portfolio, Barnett Financial
Planning will perform a risk-tolerance survey and
develop a custom-tailored, goals-based Investment
Policy Statement prior to recommending and
implementing any investments on behalf of the client.
ORANGE COUNTY OFFICE
1442 Irvine Blvd., #212
Tustin, CA 92780
RIVERSIDE COUNTY OFFICE
11801 Pierce St., 2nd Floor
Riverside, CA 92505
|Barnett Financial Planning