The Financial Discovery Group is a Registered Investment Advisor and a "Fee-Only" financial planning and investment advisory firm. A "Fee-Only" advisor is compensated solely by the client, with neither the advisor nor any related party receiving compensation that is contingent upon the purchase or sale of any product. We prepare comprehensive financial plans as well as providing investment advisory services. Our client relationships are built upon trust, understanding and service.

The Investment Policy Statement provides direction to the investment manager when investing client’s financial assets. The statement is developed following the completion of the comprehensive financial planning process. A written investment policy statement clearly defines and communicates the client’s long term goals and objectives.

There are eight components to an Investment Policy Statement:

1. Identifying values - Long term goals and objectives.
1. Defining the level of risk a client is willing to accept.
2. Establishing the expected time horizon.
3. Determining the rate-of return objective.
4. Selecting the asset classes to be used in building an investment portfolio.
5. Documenting the investment methodology to be used: security selection, market timing or asset allocation selection.
6. Establishing a strategic implementation plan.
7. Establishing the means for making periodic adjustments to the portfolio.

As part of the planning process, we analyze existing investment portfolios, determine the client’s risk tolerance comfort levels and make overall recommendations for portfolio allocation and diversification.

Conceptually we believe that long term investment goals should be twofold:

1. To have broad representation among companies of all kinds: large and small, mature and rapidly growing, domestic and international. The diversity is by size, type, and geography. In a truly diversified portfolio something always seems as if it is not working. A well-diversified portfolio will smooth out the ups and downs. In other words, diversity can moderate volatility but not eliminate it.
2. Find the highest quality money managers that have the best research staffs, many years of total investment experience, and that believe passionately in their approach and stick to their pronounced disciplines

We believe that investors should buy stocks and/or mutual funds to hold for the long term and not move in and out of them unless something fundamentally changes about the investment or in the life of the client.

Growth and Value tend to move counter cyclical. Large Cap and Small Cap tend to act contrary to one another. Foreign markets historically and over time are not correlated with U.S. markets and provide an additional layer of diversity. At times they can be much more volatile than U.S. stock portfolios.

Building a portfolio of diversified funds results in a unifying logic. The reason for constructing a diversified portfolio of investments is to smooth out ups and downs (volatility) and to contribute to and perhaps enhance the portfolio’s overall return.

The allocation of investments should include a percentage of assets in fixed income funds. While the potential long-term return on these funds is not as great as equities, they do provide some cushion to the volatility in the overall financial market.

When selecting a mutual fund or a money manager for clients, each of the following factors are considered:

The Investment Policy Statement outlines the client’s investment process parameters, including the investment time horizon. We believe that the minimum time period for investing in stocks (equities) is five to ten years. The longer the time horizon, the better chance that stocks will provide superior performance to bonds (fixed income).

Modern Portfolio Theory holds that risk in a portfolio can be reduced through diversity and asset allocation. An investment portfolio should reflect the risk tolerance of the individual. Further, we believe in diverse portfolios that are managed using different investment styles, spread across several asset classes and multiple industry groups. We do not attempt to time the markets or select specific market sectors/industry groups that will be in favor during a future time frame.

As "asset allocators", we believe that while market values will exceed and under-perform long term averages at any point in time, they will eventually return to their historical mean (or long term averages). We use Performance Management software to measure the performance of client investment portfolios.

Our investment advice and decision making process is based upon our investment philosophy. We believe that our clients will attain their financial goals when they maintain the discipline to stay with their financial plan during the good times and the not so good times. As part of the financial planning process we develop an investment policy statement that provides a framework and instructions for the implementation and management of investment portfolios. Our goal is to assure that our clients clearly understand where they are going and how they will get there.