Content provided by Joe Smith, CFA, Senior Market Strategist

Last month, I had the opportunity to participate at the annual NorthStar Summit in Nashville, Tennessee. The event allowed me to get to know more than 75 of the most successful advisors we partner with at CLS. As I did, I got a sense of what makes these individuals wonderful folks to work with. First, they all have a passion for what they do: empower their clients. Second, they provide a great amount of value by helping manage their clients’ expectations through good times and bad. Third, they are firm believers in the power of risk-budgeted portfolios.

Sitting on the plane back to Omaha and reflecting on the entire conference experience, I came to an interesting realization. What gets me excited about coming into work every day at CLS is very similar to what motivates our advisors: the ability to deliver an amazing client experience.  The key to that client experience all comes down to the ability to manage risk and expectations on a consistent basis. Risk budgeting goes beyond helping me as a professional investor think about optimal portfolio positioning; it is an important tool our advisors leverage to keep clients’ expectations anchored in the short term, so they can achieve financial success in the long term.


The views expressed herein are exclusively those of CLS Investments, LLC, and are not meant as investment advice and are subject to change.  No part of this report may be reproduced in any manner without the express written permission of CLS Investments, LLC.  Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such.  All opinions expressed herein are subject to change without notice.  This information is prepared for general information only.  It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report.  You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized.  You should note that security values may fluctuate and that each security’s price or value may rise or fall.  Accordingly, investors may receive back less than originally invested.  Past performance is not a guide to future performance.  Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk.  These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.
A client’s risk budget is derived from the client’s specific answers to CLS’s Confidential Client Profile questionnaire, which establishes the client’s financial goals, ability to handle risk, and overall investment time horizon. The individual client risk budget is expressed as a percentage of the risk of a well-diversified equity portfolio.