IS YOUR INVESTMENT PORTFOLIO OUT OF BALANCE?
A Smart Asset Allocation Strategy Can Minimize Risk and Maximize Returns
We have all heard the adage, "Don't put all your eggs in one basket." While it may be simple when you begin, the solution to keeping your eggs over the long haul is a bit more complicated than you may think.
Dividing your eggs (investment capital) into multiple baskets (investment vehicles) is an excellent way to start any portfolio. Still, it is important to monitor the performance of your investments over time. Since the value of different "eggs" changes over time as markets ebb and flow, your investment portfolio can look lopsided. This type of portfolio is said to be "unbalanced," even if it was "balanced" when it was created. The key to maintaining a healthy portfolio is to rebalance the assets as their values change. This strategy is designed to reduce risks, increase gains, and protect your investment portfolio over the long-term.
Balancing Your Portfolio: A Rebalancing Journey
Let's look at a hypothetical investment portfolio below:
Navigating Market Shifts
Consider a hypothetical portfolio: an ideal mix of 25% precious metals and 75% diversified investments. However, over five years, market dynamics nudged the balance to 15% in precious metals and 85% in other investments—drifting away from the initial allocation.
Restoring Equilibrium
A strategic move is needed to realign. Balance is restored by reallocating 10% from the overperforming asset class to the underperforming one. This proactive step ensures the portfolio resumes its intended asset mix, fostering resilience and stability.
The Significance of Rebalancing
Maintaining your portfolio's balance is pivotal. Market fluctuations can skew what began as a well-diversified investment mix over time. Rebalancing is the compass guiding your investments back to their intended course.
Finding Your Investment Balance: Tailoring Portfolios to Your Goals
Crafting Your Strategy
Crafting a robust allocation strategy hinges on several factors: your time horizon, risk tolerance, long-term goals, and available capital. Each asset class carries its unique risk and reward dynamics. For instance, longer timelines and lower risk tolerance often favor conservative approaches, while shorter horizons may lean toward aggressive strategies.
Exploring Sample Portfolios
Explore our series of sample portfolios, each tailored to varying risk tolerances—ranging from aggressive to conservative. These models showcase diversified asset allocations to match your comfort level with risk, enabling you to choose a strategy aligned with your financial aspirations.
The Power of Rebalancing
Maintaining your target asset allocation is crucial. Rebalancing your portfolio ensures adherence to your initial strategy and accommodates adjustments if your investment preferences evolve. This proactive step empowers you to stay committed to your plan, even amidst market fluctuations, ultimately reducing risks and amplifying potential returns.
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Navigating Portfolio Rebalancing: Empowering Your Financial Future
Expert Guidance for Rebalancing
Do you need more certainty about the optimal frequency or method for rebalancing your investment portfolio? Our team of Precious Metals Specialists is here to offer personalized guidance. Contact us at (844) 506-2392 to discover the ideal approach for maintaining a balanced and diversified investment portfolio.
Your financial assets are under your control, and you have the prerogative to make informed choices aligned with your financial objectives. Your decisions drive your portfolio's direction, ensuring a strategy that reflects your aspirations.
SPECIAL NOTE FOR INVESTORS WHO USE A FINANCIAL PLANNER:
For investors collaborating with a financial planner, diverging from managed accounts to include precious metals might meet resistance.
While a good advisor prioritizes your well-being, reallocating assets from traditional investments to precious metals can impact their firm's assets under management (AUM) and their compensation. Remember, the ultimate decision regarding your assets lies with you, not your advisor or our firm.
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