2. Asset-Liability Match
Once we understand our clients’ needs and goals, we allocate the appropriate funds into one of four categories, each requiring a unique investment strategy and risk profile. These categories are: emergency (3-6 months of living expenses), medium-term (living needs and specific purposes for next 1-4 years), long-term (will be needed for living needs and specific purposes 5+ years from now), and legacy (not expected to ever be needed for living needs, ultimately for generational gifts and charitable intentions). We then match the duration of the investments to the duration of the need. For example, we would hold cash in an emergency fund and allocate stocks and private investments in a legacy fund.