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Portfolio Management

What You Should Know about Portfolio Management

Client Centered

Most people get started with investing through an employer-sponsored retirement plan at work, such as a 401(k) or 403(b). What you might not know is that every investment portfolio requires ongoing management, especially your retirement account. It’s not enough to set up the account and make regular contributions. That’s where portfolio management comes in.

Portfolio management is the handling of your financial assets, with the goal of increasing your wealth and minimizing investment risks. It can include buying or selling stocks on your behalf, balancing and analyzing the portfolio, and making recommendations for improvements. We recommend working with our experienced financial advisors to keep you on track for your financial goals and mitigate your risk.

How Investments Secure Your Financial Future

It’s extremely difficult to build wealth by saving money. Currently, inflation outpaces the interest you receive in a savings account. This means the money you have in savings actually loses value. When you combine that with the rising cost of living, you cannot support your lifestyle in retirement by saving money. If you want to grow wealth or even just prepare yourself for retirement, you must invest your money. 

If you’re risk averse, you may not be ready to invest your money, even though you also lose money in a savings account. While you can’t avoid all risks entirely, investment risks can be mitigated. With professional portfolio management, our financial advisors use risk reductions strategies to increase your wealth.

How Portfolio Management Reduces Investment Risk

Client Centered

Our financial advisors understand that investing your money can be risky. But with the right risk management strategies in place, we can mitigate risk and help you work toward your financial goals. Here are some examples of risk management:

  • Asset diversification
  • Asset management and analysis
  • Planning the impact on your taxes
  • Aligning your assets with your risk tolerance

Your portfolio includes a variety of assets, including stocks, bonds, mutual funds, and options. Some assets carry more inherent risk than others, but they may also offer greater potential rewards. For example, bonds are not as risky as stocks, but they still provide better returns than using a savings or money market account.

FAQs about Portfolio Management

If you’re new to investing, you probably have a lot of questions about your portfolio, which assets to invest in, and how to reduce your risk. We’re happy to help you with your specific situation during a phone call or consultation. In the meantime, here are some common questions and our answers to help you get started.

Should I Be Investing?

Yes. If you’re having trouble making ends meet or are in over your head with debt, our financial advisors may not recommend investments for you. Otherwise, setting aside a portion of your earnings every month to invest in yourself is the best way to prepare for your financial future. This includes saving for retirement and reaching other financial goals. 

How Can I Mitigate Investment Risk?

Our portfolio managers use risk management strategies to minimize the risk of investing. This includes using the right diversification strategy that fits your risk tolerance and timelines. We also analyze your assets and evaluate performance regularly to ensure your investments still meet your goals. When you work with a financial professional, you always have someone to talk to when you have questions about your investments. 

What Is My Risk Tolerance?

Risk tolerance is a very personal thing, but it’s also directly related to how much time you have before you need to see results. A middle-aged adult can take more risks with their portfolio because they have a few decades before they plan to retire. Someone who is closer to retirement age may not want to take significant risks with their investments and prefers to play it safe. Also, if you have other retirement income, you might be more likely to choose high-risk assets that have a potential for high returns.

Call Us to Talk about Your Investment Goals

The first step is getting to know you. When we design your portfolio, we think about your risk tolerance, your timelines, and your objectives before we suggest specific investments. Together, we’ll create the portfolio that sets you on the path to financial success. Call us today to make an appointment with one of our financial advisors.

For more information about our firm and the services we offer, send us a quick email or call the office. We would welcome the opportunity to speak with you. | (201) 446-5826