Once we have a clear understanding of assets available for investment management, BHK seeks to define investment objectives as to risk versus return and to schedule future liablities that must be met from investment return or capital withdrawals.

• Spending policy or cashflow needs, both current and future, are evaluated to create a schedule of future liabilities
• Past reactions to varying investment environments are discussed in an effort to develop a risk profile
  • How much short-term volatility might be acceptable?
  • What portfolio losses might be unacceptable in difficult environments?
  • What asset classes have or have not proved to be acceptable in the past?
  • What asset classes are familiar?
  • What is the return expectation (Absolute, Relative, Real)?
• Investment Objectives are outlined