In my investment strategy, I will never promise You unconditional gains. I just do the investment job for You.
What does it mean? How does it make a difference with the other investment advisors performance, other big banks, …?
Any investment strategy, by definition takes into account 3 key considerations for a successful portfolio, which are the following:
- I Create a tailored investment plan
- I Invest at the right level of Your risk profile
- I Manage Your plan
Key 1: Create a tailored investment plan
You first have to define Your goals. They may include wealth preservation, cashflow generation, capital growth or just building a lasting financial legacy.
Defining Your goals will make it easier to measure both where You stand today and where You stand relative to the future You envision.
Being UNIQUE, I believe that every one of You is having a special situation that requires a special solution, a tailored-made investment strategy to meet Your needs and very special lifestyle.
Consider how much You think You’ll need in order to accomplish Your goal, as well as the time frame You have to achieve it. For instance, creating a financial legacy to pass along to Your grandchildren is likely to require a longer-term plan than saving for Your children’s college tuition 10 years from now.
Key 2: Invest at the right level of risk
Generally speaking, the more risk You’re willing to tolerate, the larger gains—and steeper losses—You can reasonably expect.
We need to bear in mind the actual markets’ turmoil that we are undergoing as investment strategies that worked for the last 20 years are not sure to do so if we enter the markets now. But not only markets conditions that matter.
It might be You have a target to reach through being disruptive, innovative or secured for instance. Should You have a cash mindset, You might reduce Your target to preserve the value of Your actual inherited wealth and protect it from inflation erosion for instance.
You might seek a capital growth, then You will take advantage of the stock market slide to build up an opportunistic portfolio considering the implication of each single company business You are selecting to make sure You are including all pressure signals of interconnected web of businesses.
And while diversification and asset allocation can never guarantee that You won’t experience a loss, then being in the market for less time may be more concerned with protecting what You have from a drop in value. In such situations, a more conservative blend of investments with a higher allocation to bonds and short-term investments would likely be more appropriate. While history suggests that these assets can’t match the growth potential of stocks, they also generally hold up better during market downturns.
You might be juggling several short- and long-term goals at once, from simple saving to building an emergency fund. Consider how much of Your investment portfolio You would like to allocate to more conservative options with less risk of loss versus to more aggressive options with more growth potential. As You move closer to Your goal, consider adjusting Your asset allocation to build in more protection from the market’s ups and downs.
Choose an investment mix that meets Your needs
Generally, target asset mixes show how representative asset mixes reflecting different risk and return characteristics can be created to help meet investors’ needs and goals. You should choose Your own investment mix based on Your particular objectives and situation. Remember, You may change how Your account is invested. Be sure to review Your decisions periodically to make sure they are still consistent with Your goals. Asset allocation does not ensure a profit or guarantee against loss.
Key 3: Manage Your plan
Managing Your own investments can be a challenge during downturn. However, the process of investing can be made easier by adopting a consistent, repeatable strategy that You stick to no matter what happens in the markets.
You have options to manage Your investments. You can do it yourself, including taking the time to research investment options and make choices about what to buy and when to buy it.
Another option is to outsource the management of Your plan to a professional. Doing so may help provide that extra level of discipline that inspires You to stick to Your plan.
If You do choose to manage Your own portfolio, You will need to:
- Research — Evaluate different investment options I submit to You to find the products that fit Your asset allocation strategy.
- Select investments — I help in choosing but You decide what to buy and when.
- Monitor — I help in evaluating Your investments periodically for changes in strategy, relative performance, and risk based on our discussion.
- Rebalance — I help in revisiting Your investment mix to maintain the risk level You are comfortable with.
- Manage taxes — Provide advice on how to decide how to implement tax-loss harvesting, tax-savvy withdrawals, and asset location strategies to manage taxes through tax experts.
The process of creating a plan, choosing investments, and managing Your portfolio is a complex one—but it’s worth it.
Once You have a plan You feel confident, You’ll be better positioned to weather the ups and downs of the market. And You’ll be less likely to make those emotional decisions that get so many investors in trouble.
In all cases, I believe that markets are giving us the signals that we need to go more and more to real finance that is connected to real economy. This require a deep change in any new established investment strategy that should be based less on speculation, but more on financial products that play real role in economy.