David J Gruesser, CFP®, CIMA®

Every financial advisor develops a particular approach to investing, based on their own ideas and the needs of their clients. My core principles of portfolio management approach include these five “pillars”:

#1. Start with a goal – and stick to it
It’s common to focus on returns when building or evaluating a portfolio. And returns are important, of course. But equally important is downside risk, which is inherent in any investment. To help manage risk, I prefer to start with a client goal as a benchmark – that way, I can focus on striving for the required return at the lowest possible risk.

#2. The importance of dividends.
The “hidden” return in a stock portfolio is dividends – over many decades, dividends have accounted for approximately 40% of market returns (Morningstar & Hartford Funds, 2/20). I generally look to incorporate dividend-paying stocks into client portfolios. If you ignore dividends, you’re investing with one hand tied behind your back.

#3. Know what you own
It’s a fact of life that markets fluctuate. Sometimes they go up, sometimes down. But that’s the market as a whole. I typically prefer individual stocks (rather than funds) in a portfolio – when you know exactly what you own, you increase your agility to respond to evolving circumstances.

#4. Preservation as a goal during transitions
Many of my clients start a relationship with me in response to a major financial event, like retirement or selling a business. At that time, they are often focused on preserving what they have. For many clients of means, the mandate remains wealth preservation rather than growth, which provides a solid strategic direction for their portfolio.

#5 SWAN
SWAN is an acronym for “Sleep Well At Night.” Financial stress is a real thing for many people, regardless of income level or existing wealth. I want my clients to feel comfortable with their investments under all circumstances, and build portfolios to reflect their goals, preferences and risk tolerance.

Equity securities may fluctuate in response to news on companies, industries, market conditions and the general economic environment. Companies cannot assure or guarantee a certain rate of return or dividend yield; they can increase, decrease or totally eliminate their dividends without notice.

Professional wealth management isn’t a guessing game. I believe the most effective way to help clients reach their goals is to use an established process to help determine, articulate and build toward the desired outcome. I use the following 5-step process.

1. Discovery
Listen – what’s important to you, your family and your future?
Learn – what are your preferences and risk tolerance?
Gather – centralize documents around your current status and finances.

2. Analysis
Review – understand your current financial situation.
Calculate – what is the best way to reach your goals?
Consider – are there potential shortfalls or events that might derail your plans?

3. Plan
Create – develop a custom wealth management plan.
Collaborate – reach out to your attorney, CPA or other trusted professionals.
Present – show you the plan and work together to adjust for your needs.

4. Implement
Prioritize – establish timelines for setting your plan in motion.
Manage – complete paperwork to executive agreed-upon strategies.
Construct – set up and customize tools to access your account.

5. Review
Schedule – create a calendar for ongoing review, discussion and adjustment.
Evaluate – establish strict due diligence procedures to evaluate performance.
Fine-tune – adjust your strategy and tactics as needs to adjust to changing priorities and market conditions.