Envision

The EnvisionSM  Process

Envision is an innovative profiling process that is intended to increase your confidence to help you better enjoy your life today and pursue realistic goals for tomorrow. Envision is designed to help you monitor progress toward your goals, adapt to changing conditions, and manage investment risk. This process begins with a simple discussion between you and Tom or John to identify realistic life goals, state them in measurable terms, set priorities among them, and tie them to your investment portfolio.

Using advanced statistical simulation methodology, Envision can assist in finding the delicate balance needed to help you to progress toward your goals.

With your help we can use the Envision process to help you answer critical questions all investors may face: Am I compromising my goals too much with my investment choices?  Am I taking too much risk or not enough? Am I compromising my life today for tomorrow? Do I need to reevaluate my goals or the time projected for achieving them? Based on your responses to these types of questions, investments and risk tolerance, Envision helps us set a realistic strategy.

The Target Zone

With Envision, we simultaneously evaluate your goals, your strategic asset allocation and your assets to determine the likelihood that your plan would have achieved your goals. The Envision process subjects your plan to a sophisticated stress-testing process that simulates 1,000 market environments, both good and bad. Your plan result is the percentage of the 1,000 simulations in which your goals were met for your Ideal, Acceptable, and Recommended Plan.1

Are you on target? After using Envision to determine your individual plan result, your Wachovia Securities Financial Advisor will use a chart similar to the one below to determine whether or not your current plan falls in the intended Target Zone.

 

Below Target
A Plan Result below 75 means that your plan would not have achieved your goals in a large number of the historical simulations. You may wish to consider adjustments to your goals, your allocation and/or your investments.		     Target Zone
A Plan Result between 75 and 90 means that in many of the historical simulations your plan would have achieved your goals. You might be required to make changes to your Recommended Plan in order to stay within your Target Zone, but those changes are likely to be minor.		     Above Target
A Plan Result above 90 means that in a significantly large number of historical simulations your plan would have achieved or exceeded your goals. You may wish to consider a less risky allocation, or adjustment to your goals.

 

 

 

 

 

 

1 Simulations do not represent actual investment performance and are only intended to provide you with an opportunity to evaluate your Recommended Plan, including your asset allocation.

Envision uses Monte Carlo simulations, which are based on hypothetical and historical market information; there is no guarantee that actual future investments will perform in accordance with the probability assessment.

Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns.

 

Tracking your Progress 

Envision charts the progress of your portfolio in relation to your target zone over time. The graph below is a sample of a client whose investments, although fluctuating, are within his target zone:

The Forbes & Thompson Investment Group will be able to monitor your portfolio values in relation to what is needed to meet your goals and aspirations. Through periodic monitoring, you can assess the impact that your actual savings and spending patterns, investment returns and portfolio values have had on your chances of successfully meeting your goals. In addition, you can add new goals. As your circumstances or situation changes we will be able to update as well as monitor your progress toward your goals and aspirations as often as you like.

IMPORTANT: The projections or other information generated by Envision regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.

Envision utilizes a simulation model to test your plans. This model includes assumptions on inflation, financial market returns and the potential relationship between these variables. These assumptions were derived from analysis of historical data. The primary data used in calculating performance statistics is provided by the Center for Research in Securities Pricing. Using Monte Carlo simulation, Envision simulates 1,000 different potential outcomes over a lifetime of investing, incorporating varying historical risk, return, and correlation between the assets based on indices over several market cycles. Some market indices do not provide sufficient historical data to gauge asset class performance over multiple market cycles. In those cases, we have made some adjustments, including the use of performance statistics of related asset classes, to reflect various market cycles that may not be represented in the time period for which data is available.