Asset allocation
Have you ever heard the saying, “Don’t put all of your eggs in one basket”? This is the basic thinking behind a strategy called asset allocation.
Asset allocation shouldn’t be a guessing game; you can control your risk and help build a more solid financial future by investing in a combination of assets that will provide the highest expected rate of return possible at a desired level of risk. Your financial advisor can help you determine your personal risk/return profile and help you identify the asset mix that is most likely to achieve your personal objectives, while fitting with your specific risk tolerance.
Slow and steady wins the race
Why long-term investing works
When it comes to investing, it’s often best to take a long-term, disciplined approach. In the short term, markets can be volatile, and it is often tempting to switch strategies and investments as a knee-jerk reaction to the latest catastrophic news story. This is not a good approach to investing, and it has been shown that investors who remain fully invested over the long-term average better than those who do not.
A disciplined strategy for investing relies on the historical fact that equity markets are cyclical and will experience peaks and troughs on the way to long-term gains. Investing based on short-term performance can be very tempting, but making decisions based on this can have an adverse impact on future investment returns. In fact, investors who switch to the best-performing asset class of the previous year are often worse off than investors who maintain their investments in a balanced portfolio. Your financial advisor can help you structure a long-term approach to your investments, which includes a balanced portfolio that takes into account your personal investment style, your financial goals and your tolerance to risk.