The most important investment planning analysis provided by TAMRIS is its "short term income and capital security analysis". How would your portfolio cope with a stock market crash, an economic recession and a prolonged decline in the stock market? How would your portfolio cope with higher inflation? How would your portfolio be affected by a period of significant risk and to what extent would your financial security be affected? How long could your portfolio support your financial needs and remain unaffected by short term risks? 1 month, a year, 2 years, 5 years 10 years or more? Do you know how much security your portfolio provides you with? Would you have to sell investments to meet financial needs in the event of a period of significant risk? Can your advisor answer the above questions.
This analysis will assess the following. The liquidity and structure of the low risk portfolio and its ability to meet your financial needs as and when they arise without having to sell either low risk investments or equities at that point in time. An efficient manager will plan in advance for these needs and will not leave your security at the mercy of either the markets or the seats of their pants. It will also assess the manager's discipline for managing the risks and return opportunities associated with the running a portfolio structured to meet financial needs. The amount of security provided by your portfolio in the event of significant stock market and economic risks and for how long your portfolio would be able to provide this security.
In other words, is your portfolio structured so that your financial security is unlikely to be affected by natural and significant risk events. . The following is an excerpt from the income and capital security analysis TAMRIS conducts. It shows how long your low risk assets could be used to support financial needs without having to touch your equity investments in the event of significant stock market and economic risk. In this instance the portfolio could meet financial needs for at least 10 years without having to touch any equities.
It ties the structure of the portfolio to the one benchmark that truly affects the client, that of financial security, as represented by the portfolio’s ability to provide income and capital security in the face of natural significant risks.
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