Investment Policy and Process
For over 23 years, Valtinson Financial Services has helped individual investors develop investment porfolios to meet their objectives. We do so by using the principles of asset allocation that will potentially maximize the level of return based on the investor`s comfortable risk level.
Defining Objectives
The first step in developing your portfolio is to identify your long-term objectives.
With your objectives clearly defined, you are more likely to stay with the program and achieve long-term investment success.
Valtinson Financial Services offers you a wide choice of portfolio alternatives. This permits you to choose a portfolio that is appropriate for your return objectives, time horizon and personal tolerance for risk and volatility.
Diversification
After defining your objectives, the next step is to properly diversify the portfolio. We do this by building each portfolio from combinations of asset classes representing major stock and bond markets from around the world. By combining investments in different markets, the ups in some markets offset the downs in others. We construct each portfolio in an effort to maximize the benefits of diversification and generate the highest long-term returns that can be achieved within your comfortable level of risk.
To capture the opportunities that exist through worldwide investing, we use the following asset classes:
Asset Classes Used in Valtinson Financial Services Portfolios
Domestics
Large U.S. Stocks
Mid-Size U.S. Stocks
Small U.S. Stocks
Real Estate Funds
High-Quality Bonds
High-Yield Bonds
Floating Rate Bonds
Money Markets |
International
European Stocks
EAFE-Europe, Australia,
Far East
Pacific Basin Stocks
Emerging Markets Stocks
Sub-Sectors
Technology
Telecommunications
Health Care |
International investments are subject to special risk, such as political unrest, economic instability and currency fluctuations.
Asset Allocation
The next step is asset allocation. Simply stated, asset allocation is the decision about how to divide the assets in a portfolio among the different asset classes. This is the most important part of portfolio construction. Studies show that the asset allocation decisions account for over 90% of the variability of a portfolio’s return.
Market movements, contributions, and withdrawals can affect the allocation of assets in a portfolio. So we continuously monitor each portfolio and make any necessary adjustments.
Mutual Fund Selection
Once our asset allocation decisions are made, we implement them through the purchase of mutual funds with strong track records. We select mutual funds from the 15,000 funds we track in our database – one of the most extensive in the industry. We use quality funds, actively managed and index funds.
Before a fund is selected for a portfolio it is put through a rigorous quantitative analysis and due diligence process.
We use analysis to help identify quality mutual fund managers. Quality managers are those who have consistently added value through their ability to select securities. After our analysis we narrow the list of funds on our approved list to about 100 quality funds out of the 15,000 mutual funds in the marketplace.
In addition to the mutual fund analysis, we review the history and quality of the mutual fund’s management company and its individual manager(s). We pay close attention to the management fees charged by the fund as well. If a mutual fund passes our analysis it is eligible for inclusion in our portfolios.
Monitoring and Reporting
We will review your portfolio periodically and make any necessary adjustments. These adjustments will be designed to keep your portfolio invested within the guidelines we established.
We constantly monitor the performance of the funds in our portfolios. If a mutual fund falls below acceptable standards, we replace it. In this way we seek to hold in our portfolios only funds that will truly add value over time.
Conclusion
We look forward to working with you and helping you meet your investment goals. We believe that our experience and state of the art asset management capabilities will serve as valuable resources to you. We have the tools and experience to help you through this process and we look forward to helping you.
We use subsets of many of these asset classes in refining our portfolios. For instance, we break U.S. stocks into growth and value segment, Pacific Basin stocks into Japan and ex-Japan, and high-quality bonds into short, intermediate and long-term. Over time we may add new asset classes to our portfolios. The prices of small company stocks generally are more volatile than those of large company stocks.