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Investment Planning in Five Steps

  • Michael J. Nathanson
  • Jeffrey T. Craig
  • Jennifer A. Geoghegan
  • Nadine Gordon Lee
  • Michael A. Haber
  • Seth P. Hieken
  • Matthew C. Ilteris
  • D. Scott McDonald
  • Joseph A. Salvati
  • Stephen R. Stelljes
Chapter

Abstract

David and Abby never really bothered with an investment plan, and they paid a steep price for their indifference. A well-structured investment portfolio requires a planning process of developing and setting realistic goals, identifying return objectives, diversifying risk, and monitoring investment performance. There are five key steps that should be part of the investment-planning process: draft an investment policy statement; assess the applicable risk factors; determine the appropriate asset allocation; select the right investment vehicles; and monitor and adjust the portfolio as necessary, including through a regular rebalancing discipline. Common investor mistakes to avoid include not having a plan, overconcentration in company or other securities, attempts at market timing, and performance chasing.

Copyright information

© The Colony Group 2018

Authors and Affiliations

  • Michael J. Nathanson
    • 1
  • Jeffrey T. Craig
    • 2
  • Jennifer A. Geoghegan
    • 3
  • Nadine Gordon Lee
    • 4
  • Michael A. Haber
    • 3
  • Seth P. Hieken
    • 1
  • Matthew C. Ilteris
    • 1
  • D. Scott McDonald
    • 2
  • Joseph A. Salvati
    • 1
  • Stephen R. Stelljes
    • 2
  1. 1.The Colony GroupBostonUSA
  2. 2.The Colony GroupHinghamUSA
  3. 3.The Colony GroupNew YorkUSA
  4. 4.The Colony GroupArmonkUSA

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