Managing Investment Portfolios[管理投资组合](PPT-32).pptVIP

Selling a Client On a Plan Technical presentation (such as asset allocation) may leave a client cold Telling a “story” about how portfolio will work may convince client to do what he or she should be doing In a retirement portfolio, distinction between “income” and “cash flow” (continued) * Selling a Client On a Plan(continued) Example: Putting one year’s worth of cash withdrawals into a MMMF for a retirement portfolio If market goes up, sell stock to provide cash withdrawal If market goes down, take withdrawal from MMMF Replenish MMMF in a year in which market goes up * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Managing Investment PortfoliosThe Nine-Step Process Chapter 14 * 1. Understand the Client’s Goals Need to be as clear and precise as possible May have multiple goals each goal may need to be defined * 2. Identify a Target Rate of Return Irreconcilable differences Modify goals Save more Take more risk Delay timing of goals Lower withdrawal rate during retirement * 3. Agree on a Time Horizon Some goals have specific horizons Saving for college Date of retirement Other goals may be vague Lifespan after retirement * 4. Understand Client’s Tolerance for and Capacity for Risk Risk tolerance questionnaire No formulaic answer, but shows due diligence Score is a guideline to asset allocation For some, capacity exceeds tolerance For others, tolerance exceeds capacity * 5. Identify Asset Classes and Investment Vehicles Number of classes varies with portfolio size Investment vehicles Can be specifically named securities Can be broader such as ETFs or index funds * 6. Design the Asset Allocation Spreadsheet Percentage weights by category Expected rate of return Projected standard deviation of return Strategic Asset Allocation Set at highest level, Rarely changed Broad categories, Broad percentage ranges Used to determine portfolio’s overall level of risk * 7. Write the Investment Policy S