Faulkner Investment Services

Your investment goals are unique. That’s why FIS follows a step-by-step process that helps us customize an investment strategy just for you:

Determine Your Goals and Analyze Your Cash Flows. We begin by listening carefully to you so we understand your situation and unique goals. During this step we will also model your cash inflows and outflows year-by-year – where the money will come from (e.g., salary, Social Security, pension, portfolio withdrawals) and where the money will be spent (e.g., vacations, mortgage, education, savings, living expenses). This powerful analysis helps answer questions like:

Will we outlive our money in retirement?
Will we have enough to maintain our current standard of living?
Can we spend more on travel, a vacation home, or other luxuries?
When can we retire?
How much should we be saving?
Can we afford to help our children and grandchildren?
Can we leave a legacy to our heirs?
How can we be sure our handicapped child is supported when we’re gone?
How much can we donate to our favorite charity?

Develop Your Strategic Asset Allocation. Next, we will work together to establish the correct long-term asset allocation for your portfolio. Using the techniques of Modern Portfolio Theory (MPT), we’ll determine the correct portfolio allocation to each asset class: growth stocks, value stocks, large company stocks, small company stocks, investment grade bonds, high-yield bonds, foreign stocks, emerging markets, real estate, and so on.

Three Americans won the Nobel Prize in 1990 for developing Modern Portfolio Theory. MPT and asset allocation take advantage of dissimilar price movements in the market. For example, during one day in October of 1987 the stock market plunged 26% - the largest single day drop in 200 years. On the same day, however, bond prices soared. This is called negative correlation – two asset classes moving in opposite directions. Most investors fail to measure and then take advantage of the benefits of long-term dissimilar price movements between asset classes. We use this to your advantage, to lower your portfolio risk. You can sleep better at night, knowing that your portfolio is properly diversified.

Design Your Investment Portfolio. FIS will then design your investment portfolio using a sophisticated "multiple mutual fund manager" strategy. This strategy allocates a "team" of institutional investment managers in specially-calculated proportions to your portfolio. The mathematics of this strategy are complex and manager research time consuming. But they enable FIS to combine the talents of some of the world’s best money managers to match your target asset allocation and control risk.

A multiple-manager strategy is the single BEST way to manage your investment portfolio. That bold statement is validated by billion-dollar pension funds – huge funds that demand and can afford the best investment strategies money can buy. They utilize multiple-manager strategies to design their portfolios. FIS employs the same effective strategies to benefit your investment portfolio.

Monitor and Adjust Your Investment Portfolio. FIS provides ongoing portfolio management, adjusting your portfolio periodically to:

Account for changes in the economic and investment climate.
Take advantage of new investment opportunities.
Adjust for manager “style drift”.
Rebalance to eliminate unnecessary risk.
Respond to changes in your personal situation.
Accommodate cash added to or removed from your portfolio.

You’ll be kept up-to-date with monthly statements from Schwab and quarterly performance reviews from FIS. We’ll also meet regularly – typically once per year – to review and update your investment plan together.

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