Investing can be a complex and confusing process. Even success can derail your investment strategy. For example, let’s say that 60% of your portfolio is invested in various types of stocks.
If the market actually continues to produce better than expected returns on your stocks, after a few years you may find that 80% of your portfolio has not been invested in any of the stocks.
No matter what type of investor you are, it is important that you follow your plan. Review your asset allocation periodically (every year or two, depending on market conditions) and know when you need to make adjustments. You should also review your risk tolerance and investment profile periodically and you should be getting closer to your target. You may find that you need to adjust the exposure of your portfolio every time.
Sitting down and re-evaluating your goals, time frame, and asset allocation on a regular basis will all help you fine-tune your strategy and keep your risk tolerable.
Since investing can be complex and time consuming, many investors seek the help of professional money managers. Working with an investment manager who is sensitive to tax minimization can allow you to maximize your overall after-tax returns.
A qualified professional can help you determine which investments not only generate the highest absolute returns over many years, but are also subject to the lowest taxes.
The money manager can also show you how to properly allocate your investments across different accounts and work with you to integrate your investments and financial goals.
The materials discussed are for general illustration and/or informational purposes only and should not be construed as tax, legal or investment advice.
While the information has been compiled from sources believed to be reliable, please note that individual situations may vary and reliance should be placed on the information in consultation with individual professional advice.