Having a well-structured investment portfolio is essential to achieving one’s financial goals and minimizing volatility or risk. Mount Equity Group advisors understand that creating a long-term investment plan can be a daunting process for many. Building an effective investment portfolio involves a precise series of steps that are less daunting when broken down. The first step in planning for your future is taking a thorough assessment of your present.
Where do you stand now in relation to where you want to be? Your advisor will help sift through all your current assets, income and obligations. Then, you’ll clarify your short- and long-term financial goals. The next step is assessing your risk tolerance. What returns do you want your portfolio to generate? How much volatility and risk are you comfortable with? Once a realistic risk-return tradeoff is established, you’ll establish benchmarks to track the performance of your portfolio. At this point, having defined realistic and measurable expectations, your advisor will define the asset allocation strategy that is structured and diversified to maximize returns and minimize risk. This is the starting point: your strategy will adjust over time to accommodate major life changes like buying a home, establishing a business or approaching retirement. The final step in the initial process is selecting specific investments. Now that your portfolio is in place, your advisor will monitor your investments. As time goes on, together you’ll reassess your goals and make appropriate changes.
An individual investor’s risk-return profile determines their unique asset allocation strategy. By making strategic choices from various asset classes, a Mount Equity Group investment advisor can recommend securities that have the best chance of achieving expected returns while mitigating risk and volatility. An asset allocation strategy assigns percentages to specific asset classes: stocks, bonds, cash and cash equivalents, real estate and alternative investments.
Diversification refers to the process of reducing risk by allocating investment capital to a variety of asset types, market sectors and other categories. The purpose is maximizing returns by investing in instruments that react differently to the same economic or market situation. Adequate diversification does not 100% guarantee against losses, but it is the most effective method of reaching long-term financial goals and protecting capital.
Today’s financial markets are volatile. Reviewing your portfolio on an ongoing basis is as essential as the initial asset selection. MEG investment advisors continually monitor clients’ portfolios. Along with our analysts, they keep a close eye on current market conditions and world events along with individual security performance. In doing so, we can act immediately to keep you on track to reach your goals.