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Investment Planning in Five Steps

In: Personal Financial Planning for Executives and Entrepreneurs

Author

Listed:
  • Michael J. Nathanson

    (The Colony Group)

  • Jeffrey T. Craig

    (The Colony Group)

  • Jennifer A. Geoghegan

    (The Colony Group)

  • Nadine Gordon Lee

    (The Colony Group)

  • Michael A. Haber

    (The Colony Group)

  • Max B. Haspel

    (The Colony Group)

  • Seth P. Hieken

    (The Colony Group)

  • Matthew C. Ilteris

    (The Colony Group)

  • D. Scott McDonald

    (The Colony Group)

  • Joseph A. Salvati

    (The Colony Group)

  • Stephen R. Stelljes

    (The Colony Group)

Abstract

David and Abby never really bothered with an investment plan, and they paid a steep price for their indifference. A well-structured investment portfolio requires a planning process of developing and setting realistic goals, identifying return objectives, diversifying risk, and monitoring investment performance. There are five key steps that should be part of the investment-planning process: draft an investment policy statement; assess the applicable risk factors; determine the appropriate asset allocation; select the right investment vehicles; and monitor and adjust the portfolio as necessary, including through a regular rebalancing discipline. Common investor mistakes to avoid include not having a plan, overconcentration in company or other securities, attempts at market timing, and performance chasing.

Suggested Citation

  • Michael J. Nathanson & Jeffrey T. Craig & Jennifer A. Geoghegan & Nadine Gordon Lee & Michael A. Haber & Max B. Haspel & Seth P. Hieken & Matthew C. Ilteris & D. Scott McDonald & Joseph A. Salvati & S, 2021. "Investment Planning in Five Steps," Springer Books, in: Personal Financial Planning for Executives and Entrepreneurs, edition 2, chapter 7, pages 91-106, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-65400-9_7
    DOI: 10.1007/978-3-030-65400-9_7
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