Investment Planning
Smart Investment Planning with SHP Financial
Investment planning is at the heart of any retirement plan. At SHP Financial, we understand that effective investment planning helps lead to a secure and prosperous future. That’s why the investment strategy is the second piece of our five-part process. After creating an income plan, we help clients decide how to invest their hard earned money with their unique needs and goals in mind.
Our primary job at SHP Financial is to design, implement, and manage your portfolio. As a financial advisory team of fiduciaries, we are bound by law to act in your best interest. We see investment planning as a calculated, controlled balancing act customized for each client. With a solid income plan, clients have a clear picture of the goals of the investment plan. We help them weigh the risk versus reward of their investment decisions towards that ultimate goal.
Investment Planning in a Nutshell
Five interconnected phases comprise an investment plan.
01. Goal Setting
Establishing short and long-term objectives like saving for a child’s education, buying a home, and preparing for retirement.
02. Risk Assessment
Measuring how investment risk aligns with comfort, capacity, and goals.
03. Asset Allocation
Distributing portfolio investments and income across different asset classes.
04. Tax Considerations
Proactively applying the tax laws in your favor.
05. Review and Adjustment
Monitoring, adjusting, and rebalancing your portfolio regularly over time.
Understanding Risk in Investment Planning
While most clients know what risk is, many do not fully comprehend it as it relates to finance. Risk impacts asset allocation, and every investment carries some risk. There are two main components of risk: risk tolerance and risk capacity.
Risk Tolerance
An individual experiences risk tolerance as an emotional response. It’s a physical, visceral feeling, measuring what you own against how comfortable you are with the idea that it fluctuates and you could lose some of it. This requires some self-examination. How much risk can you tolerate? When does it stop being fun? Is the stress worth the risk? Risk tolerance should change over time as you do.
Risk Capacity
Where risk tolerance is physical, risk capacity is financial, based strictly on cash flow or disposable income. For example, you have no capacity for risk if all income is going toward bills and debts. Once you have sufficient income to cover your lifestyle, you can invest.
At SHP Financial, we run a risk analysis on client portfolios using integrated third-party analysis software. We can review your portfolio in different scenarios to determine the right amount of risk and balance of assets and investments for you.
Allocating Assets for a Diversified Portfolio
There is no way to know what the future has in store, so it’s important to be prepared for anything: bull markets, bear markets, bubbles, crashes, and corrections. Asset allocation uses diversification to minimize risk while optimizing returns. Diversification spreads investments across asset classes like stocks, bonds, and alternative investments. Distributing wealth across several categories of investments reduces the impact of a loss in a single area. SHP Financial can help you appropriately earmark the assets in your income plan for income, emergencies, and growth and build a strategy for your goals and risk profile.
A financial advisor is an invaluable investment resource, readily identifying issues, loopholes, and hidden costs. An advisor can also suggest investment alternatives that might be better for your portfolio. As your trusted partner, we sit on the same side of the table and share your goals.
Active Vs. Strategic Money Management for Continued Balance
The process of investment planning is ongoing. Changes in market conditions, financial situation, goals, and life stage influence portfolio risk and investment balance. Regular reviews should occur during any portfolio management process, but investors must decide how involved they want to be. There are two paths to money management, and we at SHP Financial use both:
Active
This hands-on investment approach is to build highly tax efficient portfolios for example in the municipal bond market or to outperform a benchmark, such as the Standard & Poor's 500 Index while managing risk. At SHP Financial, we review internal and external active money managers that match your goals and risk tolerance whether it is in equities, bonds, or the private markets.
Strategic
Also known as passive management, this method relies less on an active manager. It involves buying different index funds or low-cost exchange-traded funds (ETFs). Strategically managed investments remain in the market through all conditions as they track their underlying index. Semi-annual rebalancing ensures a well-balanced portfolio with an optimal fund mix positioned to benefit from long-term trends.
Our SHP Retirement Road Map© process includes careful investment planning and superb risk management for a well-diversified portfolio that helps produce returns toward your established targets. You’ve worked hard to build your wealth. We are committed to helping you grow and protect it.
Start Journey to Retirement NowOur Clients' Experiences
All of the following testimonials are from current SHP Financial clients, and no compensation has been given for their statements.
