Very few people have the time, temperament, and expertise to formulate a coordinated investment program. Even fewer have the large sums of capital necessary to access the best investment management organizations.

To overcome these obstacle, The Trust Company has created a fully integrated approach called Profiled Investing, that incorporates a four-step process. It is designed to develop and implement an investment program that meets your specific needs. These four steps are:

• Formulating realistic objectives
• Determining a long-range asset mix
• Selecting superior investment managers
• Constantly evaluating your portfolio performance

Our goal is to increase your probability of achieving financial success and minimize risk through diversification of assets, professional management, and prudent portfolio construction to minimize risk at all levels of return.

Formulating Realistic Objectives

To set the parameters for your portfolio, many factors must be considered. These include: time horizons, available assets, financial obligations, earning power, and risk tolerance. In each case, we carefully consider and categorize your emotional and fiscal tolerance for risk (volatility) in order to get an additional expected return. We work with you to help quantify risk, and seek to measure the impact of risk on future investments. Only through this thorough process can the proper balance of risk and return be determined and maintained.

The Trust Company will help you focus on your particular needs and you ability to bear investment risk. We will provide you with a range of reasonable return expectations and ensure that you are comfortable with the risk reward trade off that you have selected.

Once you have identified your investment profile, we then recommend a long range asset mix to meet your needs.

Determining Asset Allocation

The success of your investment program is primarily a function of your assets allocation among different classes of securities. By using an asset allocation strategy, the investor does not have to uncover the next Microsoft or buy into the market as its absolute low point to achieve above average returns.

We realize that every investor is different. That is why one of the many tools we utilize is an Asset Allocation model. This allows us to create a tailored mix between stocks and bonds, which meet your individual needs.

Select Superior Investment Managers

The selection of superior investment managers can materially improve investment returns. Yet, most investors do not have the means to evaluate a large number of investment managers in order to select those that best meet their needs. Moreover, many investment management organizations do accept accounts of less than $5 million. We maintain a database of thousands of investment managers, performance returns, portfolio classifications and risk measures. This comprehensive database allows us to constantly monitor current and prospective managers.

We act as an advocate for you, our client, in every phase of our service. We choose the best managers and when necessary, we change them.

Evaluating Performance

Although often overlooked, timely performance evaluation and reporting is a crucial aspect of any successful investment program. Simply stated, you have to measure to manage.

Therefore, we provide each client with a clear and concise report that explains how his or her investments are performing relative to the market. Also, we supply you with all the supporting financial information your attorney or accountant requires.

Expectations

Achieving one's investment goals is primarily a function of two important factors. The first and most obvious factor is the performance of one's investment portfolio. The second factor, the reasonableness of one's goal, is not quite so obvious.

Over the past decade, stocks have provided an annual return in excess of 18%, while bonds have provided returns in excess of 7% (as measured by the S&P 500 and Lehman Intermediate Gov't/Corp Indices). Additionally, this was achieved in an environment characterized by inflation of approximately 2.5%. We believe it is a serious mistake for investors to extrapolate returns of this magnitude into the future. If we focus on longer periods of time, returns of 11% on stocks and 5% on bonds are more typical.

We fully expect our managers to generate returns above the broad market indices over a full market cycle. It is possible that changes in the world economy will result in longer-term returns that equal the excellent performance enjoyed in recent years. However, investors should not base their investment expectations on potentially inflated returns. We recommend that investors plan on moderate, reasonable rates of return and establish an appropriate asset mix.

The Dangers Of Market Timing

Click here for an updated analysis on the dangers of market timing. (PDF)