An All-Weather Portfolio
While everyone can agree that asset allocation is an important part of an investment strategy, not everyone is willing to employ it. Many investors would rather spend the bulk of their time searching for the latest hot investment. Why?
Asset allocation can be boring. It does not provide extravagant returns quickly. Also, the process itself can be quite daunting. There are more investment choices now than ever before and factors such as world economics, currency fluctuations, and income taxes need to be considered before making your selections. In addition, most individuals have their assets spread out among various accounts in different locations, making asset allocation even more complex.
To further complicate matters, once a portfolio is finally assembled to your satisfaction, it is usually recommended that the allocation mix be reviewed and rebalanced at least once a year.
Despite all this, asset allocation is worth the effort. It provides a disciplined approach to diversification and eliminates the need to time investment decisions.
Should I Invest in This Market?
Two of the most common questions we hear are “What is the stock market going to do?” and “What is going to happen to interest rates?” The answer to both questions is, “They will go up, down, stay the same, or all three.” Each day we read differing opinions on what is going to happen in the near future from the “experts” who are paid to know.
No one can predict the future direction of the stock market or interest rates with total accuracy. There are just too many variables affecting them.
Should investors give up attempting to invest their money intelligently? No! There are many ways to help you reduce the effects of market variations and the associated risks over the long term. By diversifying portfolios and carefully acquiring and holding assets, the risks can be reduced.
One of the reasons for not achieving financial goals is not the ups and downs of the market and interest rates. Instead, it is a combination of inertia, fear, and inconsistency that allows investors to lose sight of long-term goals and the means to help them reach them. That is what we want to help you achieve.
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