Investment Portfolio Design Process

As a dentist, you have long-term career goals that require time and effort. But that doesn't mean you need to halt your personal goals as a consequence. An investment portfolio tailored to your needs can help you achieve your professional and personal aspirations.

The purpose of this page is to discuss investment portfolios and how the right design can help set you up for success.


What Is an Investment Portfolio?

An investment portfolio is a planned allocation of assets. It shows how your money is used to grow wealth and achieve your goals.

An investment portfolio may include:

  • Stocks.
  • Bonds.
  • Commodities.
  • Cash.
  • Closed-end funds.
  • Exchange-traded funds (ETFs).

Determining what and how much should go into your portfolio is part of the design process many people struggle to get right.

Why Is a Strong Investment Portfolio So Important?

A strong investment portfolio design can ensure that your money is working for you in a way that aligns with your long-term plans. It can adapt to changes in your life, such as opening another dental practice or getting married. It can also be more resilient against economic downturns. 


What Are the Different Types of Investment Portfolios?

Investment Portfolio Design - Asset AllocationThe design process of a portfolio depends on the type of investment strategy you choose to employ, elected based on your goals, financial standing, and risk tolerance. 


With an aggressive portfolio, your assets are 100% stock. This is a volatile and potentially high-risk plan that could conceivably pay out significantly in the end — if you can endure the tough points and resist making emotional or impulsive financial decisions.


With a growth-focused portfolio, 80% of your assets are stock. Still considered high-risk, this portfolio has the remaining 20% of assets in bonds and is often called the 80/20 asset allocation. This portfolio has the potential for high returns and growth.

Growth & Income

A growth and income asset allocation strategy is 60% in stock and the remaining 40% in bonds. Growth is still the priority, but the portfolio can also provide short-term income.

Income & Growth

Here, 40% of your assets are in stocks while 60% are in bonds. Growth is still possible, but there is a slight shift in focus to providing income. 


With only 20% of your assets allocated to stocks, this is a lower-risk plan. However, with low risk comes a lower potential for considerable growth. 

ETF Model 

This portfolio is centered around ETFs and additional exchange-traded options as the name implies. This portfolio is typically managed continuously by an investment management team and offers a diversified approach that can balance risk and return — if managed correctly.

Stock Basket Model

Using share weighting, a stock basket model is an exotic option that allocates assets equally between shares. This strategy is useful for large portfolios that are looking for diversity. 

HIP Account

A HIP account model focuses on generating income using the environmental, social, and governance (ESG) framework for portfolio development. This strategy is a form of sustainable investing that uses ESG factors to evaluate a portfolio’s financial returns and impact.


The Investment Portfolio Design Process

While there are many ways to strategically develop your investment portfolio, it’s human nature to make impulsive financial decisions in the face of a bear market or economic downtown. 

However, a bucket strategy organizes investments based on the time horizon and risk factors, providing a more palatable long-term plan for many investors. Although the makeup of a portfolio will depend on the type, the process for designing a customized portfolio is relatively standardized:

1. Establish Your Investment Portfolio Goals

Having a game plan is essential to creating a portfolio that will work for you. To begin, set specific goals, objectives, and timelines. Some questions to consider when creating your goals include:

  • What personal goals do I want to achieve and when?
  • What professional goals do I want to achieve and when?
  • What impact do I want to have on the lives of others?
  • What age do I want to retire?
  • What are my retirement plans?

Account for Change & Inflation

When determining how you want your finances to support your goals, remember that the future holds unforeseen opportunities and challenges. Real-world factors like new tax legislation or tax law revisions could alter how to best approach your investment management strategy. 

Additionally, inflation is a factor that should be accounted for when devising your portfolio goals. For example, if you throw your savings into a basic savings account, it is unlikely to earn enough interest to cover inflation in the future. 

Know Your Risk Tolerance

Analyze what would work for your needs. You can model portfolios from conservative to aggressive and for taxable and non-taxable accounts. A financial advisor can also help you determine your risk tolerance.

Estimate the Time Needed To Meet Your Goals

Although there are some outside factors that can influence your timeline, you can look at data to get an idea of a realistic timeframe for meeting your goals.

Historical Investment Returns & Theoretical Investment Returns

Analysts use historical return data to better understand how assets such as security may react in future circumstances. However, the idea that you can average past returns to calculate your actual rate of return is a myth. Research and modern theory can help you obtain a realistic timeframe, but it’s important to remember that how your portfolio is managed will impact your investment timelines.  

In most cases, your portfolio will have both active and passive management. With this in mind, you should take a goal-based approach to the portfolio design process.

2. Determine Your Asset Allocation

Investment Portfolio Design - Diversified PortfolioA diversified portfolio can help with performance stability. However, the degree of diversification should align with your chosen portfolio design. For example, if you have a growth strategy in which a majority of your asset allocation is in stocks, diversification can help you ride the ups and downs of the market. 

Over-diversification can have its own dangers as it increases risk and may reduce returns. So finding the “just right” asset allocation strategy can be challenging. A financial advisor can help you review the types of assets that would bring diversity to your portfolio without going too far.

The core types of assets include:

  • Individual stocks.
  • Individual bonds.
  • Mutual funds.
  • Exchange-traded funds.

Other types of Assets include:

  • Equities.
  • Commodities such as energy, agriculture, and cryptocurrency.
  • Alternatives such as Futures, hedge funds, and collectibles.

3. Execute Your Asset Allocation

Active management occurs when a professional money manager monitors your investments and seeks investment opportunities that align with your strategy. 

Passive management is done by using index funds that mirror the S&P 500 and other researched trends. 

Both are needed to allocate funds as defined by your investment portfolio type. If your portfolio design is aligned with your goals, then your asset allocation should mirror this direction by putting your investments where they belong.  

4. Maintain Your Investment Portfolio

Even a beautifully designed portfolio will still require regular monitoring and adjustments to ensure that your investments are aligned with your goals. 

Track Investments

Your portfolio of investments must be routinely tracked to make sure that your goal alignment is maintained. This is especially true for a dentist, as both professional and personal goals may be accomplished more quickly depending on your circumstances. Life events, such as wanting to buy another practice, could influence your future investment moves. However, it’s unwise to start another business venture unless you are aware of the status of your investment portfolio.

To track your investments, you’ll need to establish a frequency — when and how to evaluate your portfolio. A monthly or quarterly statement can give you an idea of your portfolio’s value as well as any drastic changes. However, making note of market changes does not mean you should go chasing returns. Informed discipline can help your portfolio flourish over time. 

Rebalance Your Portfolio

As the market and your goals change, you may need to rebalance your portfolio. An overweight portfolio means that your asset allocation is unbalanced. Typically, this means that the investor should sell overweight investments and use that gain to buy in the area that is underweight. Generally speaking, stocks tend to become overweight since they can grow reasonably quickly, and bonds may become underweight since their growth is more gradual.

For taxable accounts, capital gains taxes — particularly short-term — can be significant, especially if you need to sell a large percentage of your stocks to rebalance. That’s why you should check your portfolio about every quarter to see if small adjustments need to be made to stay the course.


How Treloar & Heisel Manages Investment Portfolio Design


Investment Portfolio Design - Managing Your PortfolioTreloar & Heisel Wealth Management considers your individual needs and aspirations to design a portfolio aligned with your financial goals — from conservative to aggressive strategies depending upon the purpose. 

However, it’s not just about picking good investments.

The Full Life Process™

As a part of The Full Life Process™, we ensure that your investments support your goals and fit into the overall architecture of your financial landscape. Our goal is to protect your assets, generate growth, and build consistent returns as your financial advisor.

Our approach to investment portfolio design aligns with that intention while balancing your unique needs in areas such as debt management or insurance coverage to avoid fragmented solutions. This may include taking into account dental school loans, personal debt, and additional sources of income to build a portfolio that works harmoniously with your lifestyle. 

Portfolios are allocated based on tax needs, including tax-sensitive and non-tax-sensitive portfolios. ESG portfolios are available for dentists who want to align their personal values with conscious investments. 

Low-Cost Options

Costs matter. Treloar & Heisel evaluates low-cost ETFs and stocks as potential options to reduce portfolio costs while still maintaining your portfolio asset location parameters. 

Researched Planning and Careful Consideration

Partnered with the WCG Investment Committee, Treloar & Heisel offers a team of experienced professionals who can design and maintain tailored investment portfolios through:

Weekly Meetings

Team meetings are held weekly to connect with investment managers and research analysts for a holistic view of investment portfolios and involved holdings. 

Stress Tests

Every quarter, a stress test is conducted using portfolio optimization tools. These tests are used to determine the status of your portfolio should certain circumstances arise. For example, a dedicated team of advisors looks at what would happen if interest rates go up or down, inflation changes, stock valuation changes, or the currency value drops. Based on the predicted impact, adjustments are made to the portfolio accordingly.

Pulling Resources 

Both internal and external resources are used to approach your portfolio allocations in an unbiased manner. Attribution reports are compiled to compare similar portfolios and analyze performance to identify areas of growth opportunity.

Deliberate Decisions Made in Your Best Interest

You’ve worked hard to build your wealth, which is why we do our best to ensure your money works for you. 

Portfolios are designed for a healthy risk vs. return based on accepted Modern Portfolio Theory and continuous research. Our advisors will walk you through their portfolio design process so that you can see how and why your portfolio is structured. During the process, your investment goals can be adjusted to match your personal levels of risk tolerance so you feel confident in your investment strategy. 

Consistent Contact and Involvement With Our Team

Treloar & Heisel acts as a fiduciary. That means everything we do is in your best interest. But it’s more than that. You are involved with us for every part of the process to ensure that our strategies fully support your life’s goals. 

During a quarterly review, advisors evaluate the current values and historical performances to predict what the returns could be. The team is also available to answer any questions and offer support, regardless if you are still growing your dental practice or are headed toward a happy retirement.


Investment Portfolio Design for Dentists

Building an investment portfolio is not a one-and-done scenario. You need a thoughtful strategy that aligns with your goals. Your investment portfolio design should be monitored and rebalanced as you grow your wealth, cultivate your dental career, and live your life to the fullest. 

If you have questions about building your portfolio, speak with an advisor.


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