Realistic Assessment

Is Your structure and plan consistent with your Needs?

The first step in the investment and financial planning process is to take a realistic assessment of your current situation/status.  People are unique and most people do not have a high interest in investing, cash flows or taxes.  Nevertheless, there is a high need for an appropriate investment portfolio and a good financial plan because it impacts your ability to meet your current and future personal goals and wishes.  There are many things in life where you don’t necessarily need a good plan but most of these things do not directly impact your current and future lifestyle.  Whether or not you have a passion and commitment for the opera, it is probably not going to be as impactful as not having a good investment and financial plan.

If you currently have no plan or source of advice, then acknowledge this fact.  This state of inertia and neglect is not conducive to your future.  Many in this stage characterize themselves as Do-It-Yourselfers-DIY.  However, DIY takes knowledge, a plan and implementation.  Even if you are knowledgeable/smart, do you have the time, and do you have the discipline to sell at the top and buy at the bottom?  If you have a good adviser, then this web site should help you understand and appreciate this person.

This is not rocket science, but it doesn’t happen without a credible and disciplined action plan.  You must translate your aspirations into a handful of goals and then into actionable habits.

Cornerstone is structured to help define and determine an investor’s current status/situation, regardless of age or portfolio size.  Cornerstone will then help with the next essential steps for achieving investment success.

-First, are you a Do-It-Yourself (DIY) investor?  If so, is this by design, or by being too busy to look at something you don’t feel like looking at?  If it is by design, then is there adequate time and resources dedicated to do a reasonable job?  If it is because of inertia, then what are the realistic next steps?  Many think they can be a DIY but history shows that most can’t.  History shows that most DIY investors are their own worst enemies.  They lack the temperament to be a disciplined investor and tend to buy at euphoric market peaks and sell at panic-driven lows, essentially Buying high and Selling Low.  This is in contrast to the need to Buy Low, Sell High.  DIY investors must also achieve diversification, they must have rebalancing capabilities, and then finally the discipline to actually implement it.  Finally, DIY investors must have a custodian with low fees and expenses.

Realistically, a DIY investor needs to determine an appropriate asset allocation structure, a decision related to the active/passive mix, and rebalancing criteria. Ideally, this would be written in an Investment Philosophy and it would be adhered in both up-markets and down-markets.  Very few investors can effectively do this on their own.

Fortunately, solutions are evolving through technology to make a DIY plan a credible option.  For example, balanced funds and target date funds can be helpful.  More recently, the so-called Robo-Adviser services can be beneficial.

-See Robo Adviser Information.

-See Target Date and Balanced Fund information.

Get an Advisor-A realistic question is whether you can be a DIY investor or whether you need help.  You are busy and focused on your career and personal interests and what you enjoy.  You often don’t find time to get to what you don’t enjoy.  A likely approach is to determine if there is a need for an adviser or money manager.  CIA provides help with finding an adviser.

A critical determination is Active/Passive.  See the Active/Passive section.  CIA recommends passive but passive is harder to find.  Make a Link to Active/Passive.

-See the Advisor Criteria.  This should include their services and how they are compensated.

Second Opinion-For individuals who already have an adviser, then Cornerstone provides a second opinion.  Is the adviser doing a good job?  Is the adviser nearing retirement, and the firm may be sold?

-Cornerstone provides adviser criteria and local recommendations.  Contact Jeff Johnson directly for assistance with CIA recommendations.

Cornerstone Models-CIA maintains various investment models that can be used on a stand-alone basis, or as a complement to your existing situation.  The Focused and the Base models are included, and more comprehensive models are available upon request.

Low Cost and a Christian perspective-Finally, the CIA Mission Statement provides a foundation for a Christian perspective based on stewardship, ethics, and faith-based priorities and commitments.