Our Investment Process
At VLP Financial Advisors our investment process is grounded in fundamental research. This research provides for appropriate asset allocation and investment manager selection to help our clients meet their long-term goals.
Our team exercises an evidence-based, quantifiably driven investment process with a focus on long-term results. We analyze each asset class individually, and then build strategies based on modern portfolio theory. We believe in the principle of diversification to improve risk-adjusted returns, and utilize a wide variety of asset classes in our portfolios.
VLP Financial Advisors’ investment process involves the following steps:
Step 1: Analyze and Understand Historical Asset Risk and Return
Our team thoroughly understands the historical performance and risk characteristics of individual asset classes. We recognize long-term fundamentals will override short-term market volatility driven by greed or fear.
Step 2: Assemble Strategic Asset Allocation to Meet Client Needs
Each client is different and will require a different asset allocation strategy to meet their needs. We work with each client to understand their specific situation and risk tolerance. From there we formulate the specific mix of assets that will give each client the highest likelihood of achieving their long-term goals.
Step 3: Select the Best Combination of Investment Managers
After a strategic asset allocation is determined, we research and analyze many data points including risk/return ratios, correlations, managerial structure and expense ratios to determine the select group of investment managers in each asset class that meet our high standards. We then work to assemble the best complimentary combination of investment managers that give our client portfolios the desired risk exposures of our determined asset allocation.
Step 4: Monitoring and Adjusting
The investment landscape is constantly changing. In an effort to exercise proactive risk management, we monitor the markets, our portfolios and our investment managers on an ongoing basis. Our firm holds quarterly investment review meetings to review our current strategy as the market and our outlook changes. At our quarterly meetings, in addition to judging asset allocation strategy and investment manager performance, our team discusses a wide variety of domestic and international economic indicators, including GDP, inflation, mutual fund flows and various valuation metrics to make sure that our clients are positioned correctly going forward. Our team also tracks major investment benchmarks and each investment manager on a weekly basis to ensure we are most up to date as the investment environment changes. We look for opportunities to improve returns, reduce risk and make incremental improvements to our client portfolios when modifications are advisable or as markets warrant.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss. Past performance is not an indication or guarantee of future results.