There are three factors regarding every client's investment program that impact the preparation of an AAA. IPEX works with clients and their investment committees to address all three: the client's investment time frame, the client's return objective and the client's risk profile. 

While all three of these factors are important, the client's investment time frame will have the biggest impact on the level of risk that the account can realistically undertake, and consequently on the types of investments that can be included. Although this issue may seem straightforward in the case of a fund that is intended to operate in perpetuity, IPEX will work with the client to ensure that they fully appreciate the implications, as far as potential short-term volatility, of utilizing a long-term time frame. 

The client's return objective is a function of three variables: the spending policy, the expected inflation rate, and the desired level of growth. When these three variables are combined, they comprise the overall return objective. Once again, all three of these major factors are related. The higher the return objective, the greater the need for a longer investment time frame and a more liberal client risk profile, in order to allow for an asset allocation that is capable of producing the targeted rate of return. 

While risk is an important factor in conducting an AAA, it is not easily defined. Therefore, in assessing a client's risk profile, IPEX addresses risk from many different perspectives, including the impact of failing to maintain purchasing power, the consequences of generating excessive volatility and the importance of reaching the return objective. IPEX will also review an extensive list of asset classes and investment styles to determine whether they are appropriate to include in the AAA, based upon the client's risk profile. Throughout this process, IPEX attaches particular importance to each client's actual investment experience. 

Finally, as IPEX believes that an AAA is considerably more art than science, we normally will provide the client with a number of different illustrations, that paint a broad picture of the potential outcomes of different allocations. We view an AAA as a tool that can assist each client in selecting their own appropriate asset allocation, not as a precise process capable of predicting the future and providing a guaranteed result.