We believe that both your financial plan and your investments should have the ability to accommodate changes in your requirements and objectives as well as in the financial markets. Through the resources of Raymond James, investors have access to an extensive array of financial strategies and services.

• Asset Allocation – Strategies to mitigate risk
• Asset Management – Professionally managed accounts
• Financial, Retirement & Estate Planning – Comprehensive, effective planning for your future – and your family's future
• Mutual Funds & Related Investments – The power of pooled investing
• Conscientious Investing – Fulfilling a personal commitment

Over the long run, the types of assets in which you are invested combined with how those assets are balanced is generally more important to your portfolio's overall performance than are the specific assets you select.

That is, determining the most appropriate asset allocation is essential to effective portfolio development. In addition, the process of selecting an appropriate investment mix provides an outstanding opportunity to rebalance your investments, review your financial needs, examine your tax situation, evaluate your tolerance for risk and assess the economic environment.

Asset Allocation and Diversification

Asset allocation* and diversification* are closely related concepts, both of which can help to control risk.

At its most basic, diversification involves spreading money across several investments, reducing the probability of suffering a catastrophic loss should one of the investments dramatically decline in value. Conversely, just as diversification can help buffer you from the impact of investments that fare exceptionally poorly, it will also tend to limit your upside should one of your investments perform exceptionally well.

Asset allocation takes this principle one step further by diversifying your portfolio not just across different investments, but across different types of investments, or "investment classes," including stocks, fixed income, cash equivalents, and real estate and other tangible assets.

Every investment involves some level of risk. Certificates of deposit (CDs), for example, are usually considered secure because they offer a fixed rate of return and typically carry federal deposit insurance. However, investing in CDs carries with it the risk that the rate of return received may not be enough to outpace inflation and taxes. Given that some degree of investment risk is unavoidable, your goal should be to maintain, and ultimately increase, your return while managing risk.

Asset allocation does not eliminate risk, but it can reduce your exposure to extreme highs and lows in performance. Effective asset allocation can also help preserve capital, increase liquidity and decrease portfolio volatility.

*Asset allocation and diversification do not ensure a profit or guarantee against a loss.

Providing Individual Solutions

At Raymond James, we understand that you are unique.

That's why we listen. Only after listening to your needs and goals for the future can we recommend personalized solutions tailored to your individual situation.

Once we have a mutual understanding of your financial goals, the first step is to organize your assets into four basic categories: stocks, fixed income, cash equivalents, and real estate and other tangible assets. This enables us to review your portfolio's existing allocation in relation to your current needs and objectives, revealing areas that might require special attention, including changes designed to help protect and strengthen the portfolio.

This process can help you attain greater control over your investment plan and enables us to supply you with a comprehensive listing of your current investments, a useful tool for you and your tax professional.

The next step is to create an asset allocation model designed specifically to help meet your unique needs. This model, when compared to your existing allocation, can help identify how to maximize the strength of your portfolio.

At this point, we will discuss possible adjustments to or restructuring of your portfolio to meet the parameters established by your new asset allocation model.

Once we have created and implemented a specific model, quarterly reviews help ensure that the portfolio is on track and provide opportunities to discuss any changes that may be appropriate.

The Raymond James Investment Policy Committee

Among the asset allocation models available for use are those published quarterly by the Raymond James Investment Policy Committee, which includes professionals who represent a cross section of investment disciplines. The committee considers current economic and market conditions and national and international events – as well as interest rates and investors' ages and income levels – to develop conservative recommendations for a percentage of assets in each of the four investment categories. These recommendations can be useful as a basis for comparison when developing individual asset allocation models.

Asset Allocation Means Service

Asset allocation enables us to work together more efficiently as a team while offering an effective procedure to follow when organizing and planning investments. Understanding the rationale underlying your portfolio's asset allocation provides new insights into and greater comfort with the investing process.

In addition, we regularly revisit your asset allocation and adjust it to reflect changing objectives and market conditions.

Asset allocation can help you:

• Control risk,
• Preserve capital,
• Increase liquidity,
• Structure your portfolio to work efficiently under changing market conditions and
• Organize portfolio information.

Utilizing asset allocation in your investment strategy could be a key component in helping you achieve your financial goals and objectives. Please contact our office today to discuss how asset allocation may work for you.

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Raymond James offers full-service asset management for clients who prefer to utilize the skills and expertise of professional money managers.

Asset Management Services – Personal asset management is now available to most investors. Our professional managers are dedicated to selecting, monitoring and adjusting investments to meet the specific objective of our clients' portfolios.

Eagle Asset Management – Eagle Asset Management's investment teams are charged with a single task: to provide long-term clients with superior risk-adjusted returns.

Eagle Boston Investment Management – Eagle Boston Investment Management specializes in seeking out opportunity in small-capitalization stocks and providing its management expertise to institutions and high-net-worth individuals. Organized in April 1992, Eagle Boston is a wholly owned subsidiary of Eagle Asset Management.

 

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Whether you are a new investor or an experienced one, investing in pooled securities, such as mutual funds, may be an easy way to diversify your holdings. A growing segment of the investment market, mutual funds are professionally managed portfolios whose shares are sold to the public in much the same way that stocks are.

A mutual fund is a way for a giant group of people to pool their money together to have more purchasing power. If you were to invest $100 a month into the stock market, you wouldn't be able to buy many shares. But if thousands of people invest $100 each month, as a group they can buy substantial shares.

Because fund managers can afford to purchase more shares, they are able to better diversify fund holdings. This, in turn, generally provides you with an instantly diversified portfolio.

Types of Funds

Thousands of funds are available to investors today, each with its own characteristics. In order to find one that's right for you, you'll need to understand the following terms:

Open-end mutual funds – Unlimited shares are sold to investors. These are bought and sold directly by the fund, not in the market. Mutual funds may invest in a wide array of stocks, bonds and other investments. Mutual funds may be "load" or "no-load" funds.

Closed-end funds – Unlike mutual funds, closed-end funds make only a limited number of shares available to the public. Once these shares are sold, the fund is listed on an exchange and new investors must purchase them in the market.

Exchange-Traded Funds – An exchange traded-fund, or ETF, is a type of investment company whose investment objective is to achieve returns similar to that of a particular market index. An ETF is similar to an index mutual fund in that it will primarily invest in the securities that are included in a selected market index. An ETF will invest in either all of the securities or a representative sample of the securities in the index. ETFs may be bought or sold throughout the day in the secondary market, but are generally not redeemable by retail investors for the underlying basket of securities they track.

ETF risks and other considerations – ETF shareholders are subject to risks similar to those affecting holders of other diversified portfolios. Although exchange-traded funds are designed to provide investment results that generally correspond to the price and yield performance of their underlying indexes, the trusts may not be able to exactly replicate the performance of the indexes because of trust expenses and other factors. An exchange-traded sector fund may also be adversely affected by the performance of that specific sector or group of industries on which it is based.

Fund Categories

Funds are grouped together based on factors such as risk tolerance and strategies. After reviewing your personal circumstances, choose a fund with an objective that adheres to your risk tolerance, timeframe and goals.

The following list includes some of the more popular groups:

Growth – Designed to produce the highest long-term results, these funds usually maximize capital appreciation with little-to-no income for the investor. Considered relatively risky, they primarily invest in companies that have potential for above-average price appreciation.

Growth and income – Much like growth funds, these are designed to produce long-term results. However, these funds also provide income to the investor. Generally, investments are divided among larger, well-seasoned companies and bonds.

Income – Most appropriate for investors seeking higher levels of income, these funds generally invest in common stocks, as well as government and corporate bonds. Normally less volatile than the stock market, they are sensitive to interest rate changes.

There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise.

Capital preservation – Typically offering stability and more safety than other types of funds, these strive to provide a small amount of income to investors. Most invest in short-term, fixed income investments.

The Prospectus: What Is It?

For more complete information about mutual funds – including charges and expenses – please ask for a prospectus. Read your prospectus carefully before you invest or send money. The mutual fund is required to provide this to you free of charge when requested. Some items to look for in the prospectus include:

Objective – A prospectus tells you what goals the fund seeks to achieve. Make sure these objectives are in line with your pre-determined objectives.

Risks – Risk factors should be considered and reviewed before making any investment. There is no assurance that a fund will achieve its investment objective. Shares of funds are subject to investment risk, including possible loss of the principal amount invested, and will fluctuate in value. You may receive more or less than you paid when you redeem your shares. Examples of other risks include but are not limited to: stock market risk, interest rate risk and currency risk.

Track record – Publicly traded funds are required to disclose results from previous years. Review the fund's one-, five- and 10-year track record for a more accurate view of past performance. But remember, past performance does not guarantee future results.

Fund management – An important aspect of the fund, the money manager's experience and tenure may affect performance. Also, if the current money manager has not been around long, the fund's previous track record may be irrelevant.

Costs – While returns aren't predictable, costs certainly are. The prospectus discloses any expenses related to the fund and how they are passed along to the investor. Review this section carefully for a complete understanding of any expenses related to the fund.

Statement of Additional Information (SAI) – In addition to the prospectus, mutual funds publish SAIs, which cover other items not mentioned in the prospectus. If you are still unsure about investing in a particular fund, request an SAI. One should be provided to you free of charge.

Why Invest in Funds?

There are three main reasons to invest in funds:

Diversification – In today's volatile economy, spreading assets among different investments may help reduce the risks associated with investing. Mutual funds, closed-end funds and ETFs can offer instant diversification to investors who otherwise may not have the purchasing power to do so. However, diversification does not ensure a profit or protect against a loss.

Convenience – Funds are easy to purchase. Investors can simply match their risk tolerance, objectives and time line to an appropriate mutual fund. Professional managers do all the work.

Professional management – Funds are handled by professionals who have both experience and knowledge of the industry. These managers conduct all the necessary research and manage all transactions in the account.

Investors should carefully consider the investment objectives, risks, charges and expenses of any investment company before investing. The prospectus contains this and other information about an investment company. The prospectus is available from your financial advisor and should be read carefully before investing.

When purchasing shares in mutual funds, you may be entitled to a discounted transaction charge based on the total number of shares of a specific mutual fund and/or family of funds you hold in your own and/or related accounts. It is, therefore, important that you tell your financial advisor of positions you already hold that he or she may not be aware of so that you can benefit from the lowest transaction charge possible on this and subsequent trades.

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