1. BEHAVIORAL FINANCE (Psychology)
The entire plan is developed with an understanding of the behavioral aspects of investing for both the client
and the investing public.
2. EFFICIENT INVESTMENTS (Mathematics)
A portfolio is designed to achieve a high expected return for a given level of risk using two tools:
2a. Asset Allocation: Determining the client's willingness and need to
take risk and then selecting non-perfectly correlated asset classes that maximize the risk return equation.
2b. Diversification: Within each asset class, maximum diversification
reduces overall risk without impacting expected return.
3. PICK THE LOW HANGING FRUIT
Most portfolios have ample opportunity to make easy changes to get greater returns without taking additional
risk. Some portfolios actually have opportunities to seize guaranteed higher returns with lower levels of risk.
