Process
Investment Policy Statement
Setting up an Investment Policy Statement is one of the most crucial steps taken when a client joins us at VCP Financial. The Investment Policy Statement defines the client's general investment goals, risk tolerance, and objectives. We refuse to settle for the generic “cookie cutter” approach.The Investment Policy Statement outlines the financial strategy that will be the guide to help us create the client's custom tailored portfolio.
Although created once, the IPS is not a static statement. Through constant communication with our clients, we continuously update and refine each client's risks and objectives.A properly constructed Investment Policy Statement provides support for following a well-conceived, long-term investment plan, rather than one that is based on false overconfidence or panic in reaction to short-term market fluctuations.
Portfolio Review / Analysis
Our Investment / Portfolio Review gives our clients detailed breakdowns and thorough analyses of their investment portfolios.
We analyze each portfolio from two directions: Top-Down and Bottom-Up.
The Top-Down approach focuses on asset diversification, correlations between holdings, and risks exposed by over-weighting any given sector or industry.
The Bottom-Up approach focuses on individual security selection. Whether it is a common stock, bond, ETF or a mutual fund, we will analyze the individual security's merits.
We then compare the client's entire portfolio against the objectives stated in their Investment Policy Statement.
Portfolio Management
Once we construct a portfolio for a client, we focus on the Long Term. We make changes when they are warranted by the Investment Policy Statement and the Macro environment. We monitor each investment for its own merits and logically adjust the holdings as needed.
We strive to minimize fees and taxes, and always consider these factors when managing our client's portfolios.We believe an open line of communication is very important, especially in today's investing environment.Since many of our accounts are non-discretionary, we speak to our clients to go over any changes in their holdings.
We make sure to review each client's portfolio at least once a quarter. In these reviews, we also discover as much as possible about any significant changes in our client's lives. Whether it be changes in marital status, employment, new child, business etc. these are all factors that make a huge difference in how we will manage our client's assets.
In our quarterly and annual reviews, we recap our client's goals, our performance, and also rebalance our holdings if necessary.