Identifying your Investment Objectives and Financial Attitude
We work with you to determine what your needs are and their priority. These might include capital preservation, growth, current income, or risk diversification. We consider your tolerance for risk. An analysis of these concerns provides the foundation for your investment strategy and begins with the preparation of a consolidated balance sheet that covers all assets of significant value: liquid securities and cash as well as less liquid assets, such as family business interests, restricted stock, retirement accounts, real estate, and collectibles.
Development of an Investment Strategy
Investment research has shown that asset allocation is by far the single most significant factor in the variability of long-term performance; even more so than security selection or market timing*. We employ a methodology that calculates an efficient frontier, which refers to a curve on which each point represents the asset allocation with the highest expected return at any given level of risk. The determination of exactly which asset allocation is most appropriate for you is a matter of personal preference that takes into account the items identified in Step 1, above.
Next Capital Management acts as an unbiased investment consultant in selecting top performing managers in each sector of your asset allocation. Based upon the breadth of our relationships and the magnitude of the assets under management, we are able to provide our clients with access to an unusually broad range of investment and management alternatives. In addition, Next Capital Management provides discretionary portfolio management.
Monitor & Review
All portfolio managers are held accountable, with reviews and reallocations performed on a regular basis. Detailed client reports are prepared quarterly.
Continuous Multi-Part Process
* Source: Brinson, G. Beebower and B. Singer, “Determinants of Portfolio Performance: An Update,” Quantitative Analysts’ Journal, 1991.