{"id":5657,"date":"2019-04-17T08:00:55","date_gmt":"2019-04-17T13:00:55","guid":{"rendered":"http:\/\/billlosey.com\/?p=5657"},"modified":"2019-04-17T08:00:55","modified_gmt":"2019-04-17T13:00:55","slug":"do-your-investments-match-your-risk-tolerance","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/do-your-investments-match-your-risk-tolerance\/","title":{"rendered":"Do Your Investments Match Your Risk Tolerance?"},"content":{"rendered":"\n<p><strong> <\/strong><em>When was the last time you looked at the content of your portfolio?<\/em><\/p>\n\n\n\n<p>From time to time, it is a\ngood idea to review how your portfolio assets are allocated \u2013 how they are\ndivided among asset classes.<\/p>\n\n\n\n<p>At the inception of your\ninvestment strategy, your target asset allocations reflect your tolerance for\nrisk. Over time, though, your portfolio may need adjustments to maintain those\ntarget allocations. <\/p>\n\n\n\n<p>Since the financial markets\nare dynamic, the different investments in your portfolio will gain or lose\nvalue as different asset classes have good or bad years. When stocks outperform\nmore conservative asset classes, the portion of your portfolio invested in\nequities grows more than the other portions. <\/p>\n\n\n\n<p>To put it another way, the\npassage of time and the performance of the markets may subtly and slowly\nimbalance your portfolio.<\/p>\n\n\n\n<p>If too large a percentage of\nyour portfolio is held in stocks or stock funds, you may shoulder more\ninvestment risk than you want. To address that risk, your portfolio holdings\ncan be realigned to respect the original (target) asset allocations.<\/p>\n\n\n\n<p><strong>A balanced portfolio is\nimportant. <\/strong>It would not be if one\ninvestment class always outperformed another \u2013 but in the ever-changing\nfinancial markets, there is no \u201calways.\u201d In certain market climates,\ninvestments with little or no correlation to the stock market become appealing.Some investors choose to maintain a significant cash position at all times,\nno matter how stocks fare. <\/p>\n\n\n\n<p>Downside risk \u2013 the\npossibility of investments losing value \u2013 can particularly sting investors who\nare overly invested in momentum\/expensive stocks. Historically, the average\nprice\/earnings ratio of the S&amp;P 500 has been around 14. A stock with a\ndramatically higher P\/E ratio may be particularly susceptible to downside risk.<\/p>\n\n\n\n<p>Under-diversification risk\ncan also prove to be an Achilles heel. As a hypothetical example of this, say a\nretiree or pre-retiree invests too heavily in seven or eight stocks. If shares\nof even one of these firms plummet, that investor\u2019s portfolio may be greatly\nimpacted.<\/p>\n\n\n\n<p><strong>Are\nyou retired or retiring soon? <\/strong>If so,\nthis is all the more reason to review and possibly adjust the investment mix in\nyour portfolio. Consistent income and the growth of your invested assets will\nbe among your priorities, and therein lies the appeal of a balanced investment\napproach, with the twin goals of managing risk and encouraging an adequate\nreturn.&nbsp; As always, please let me know how I can help you plan, invest,\nand retire with confidence.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When was the last time you looked at the content of your portfolio? From time to time, it is a good idea to review how your portfolio assets are allocated \u2013 how they are divided among asset classes. At the [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-5657","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=5657"}],"version-history":[{"count":0,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5657\/revisions"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=5657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=5657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=5657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}