Financial Portfolio Archives - Anders Wealth Management

Financial Pointers for High Net Worth Investors

by Tina Anders | Nov 16, 2020

Hello and thank you for stopping by today we are going to talk about pointers for high net worth investors.

My name is Tina Anders. I am the Fee Only fiduciary Certified Financial Planner for my firm located here in Petaluma, California, Anders wealth management. Serving primarily Napa, Marin and Sonoma counties. I am going to talk about pointers for high net worth investors, again thanks for stopping by.

So, keep saving, don’t spend all of your investment returns. You know this. Save wisely and invest wisely. You can focus on increasing your cash inflows, as well as reducing your cash outflows, thus increasing your overall wealth. While you, as a high net worth investor, may not think of yourself as a saver or someone that needs to save, you know that living below your means will allow you to achieve and maintain your desired level of wealth in a shorter amount of time.

Point number two, invest not only in United States but also in the European Union and also emerging markets. Developed countries, such as the United States and the European Union are thought to offer the most investment security, but look beyond your borders to frontier and emerging markets. Some of the top countries that the ultra wealthy are investing in are Singapore, Chile and Indonesia. Of course individual high net worth clientele, you need to do your research to make sure that these countries (or let me do it) to make sure these countries fit into your overall investment strategy and your portfolio.

Pointer number three, don’t worry about keeping up with the Joneses. Now, I know you know this cognitively but do you really know it? Many smaller investors are looking at what their peers are doing. And they try to match or beat their investment strategies. However, not getting caught up in this type of competition is critical to building personal wealth. You, a high net worth investor, know this and you should establish personal investment goals and long term investment strategies before making decisions about your investments. High net worth investors envision where they want to be in 10 years 20 years and beyond especially considering their errors. You need to adhere to an investment strategy that will get you there. Instead of trying to chase the competition or becoming frightened of the inevitable, the inevitable economic downturn, stay the course with a strong, stable portfolio.

Next pointer, have your portfolio designed for a reliable stream of income, stability, and growth. I want to just make a note here, annuities are not necessarily the best way to do this. Although a lot of people turn to annuities for reliable streams of income. There are ways to structure your portfolio for long term growth while providing a reliable and predictable income stream each year. I do this for my clients all the time. I have structured portfolios to 2008; not one client had to adjust their lifestyle. I have structured portfolios to deal with the current Covid situation. Clients are not having to adjust their lifestyle. There are ways of structuring portfolios to provide reliable and predictable income each year, no matter what’s going on in the markets.

Next pointer, rebalance your portfolio. What does that mean? I’ve talked about it in another video and I want to just cap on it right here. So, rebalancing, if you have a portfolio that is say 50% bonds and 50% stocks. Well, if stocks go up, that means the value of the stocks is higher now than 50% of the portfolio. So, you might be sitting at a 60% stocks, 40% bonds, or even more extreme than that. So, you want to rebalance back to your 50/50 if in fact, that’s your allocation. Rebalancing regularly is very important for your portfolio and for your long term stream of income and your long term wealth. You want to remain diversified, adequately diversified. You want to remain properly diversified. Even if some investors have specific allocation goals. These are high net worth people as well as not high net worth people. They often don’t keep to the rebalancing and they allow their portfolios to skew too far one way or the other. So, rebalancing is very important. A balanced portfolio typically includes the right mix of cash, stocks and bonds based on your age, your risk tolerance, your comfort zone and other factors that we would consider and that you need to consider when allocating your portfolio. For the ultra wealthy rebalancing is a necessity.

Work with a fee only fiduciary Certified Financial Planner to help you achieve your goals by staying on track.

Thank you for stopping by today. If you have comments, please do so below, including comments about the video, comments about questions that you might have for me, and or topics of interest for future videos. Happy to accommodate you. Tina Anders Anderswealth.com. Thanks again for stopping by, in your corner always.

Why Rebalance Your Financial Portfolio?

by Tina Anders | Oct 26, 2020

Hello and thank you for stopping by today. We are going to talk about rebalancing portfolios today.

My name is Tina Anders, I am the Fee Only Certified Financial Planner here in Petaluma, California. Anders wealth management is my wealth management firm serving primarily Sonoma County and Marin County in California.

Rebalancing, what’s it all about?

Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain any original or desired level of asset allocation and or risk. In short, what that means is if you have a portfolio 50% stocks and 50% bonds, and the stocks outperform bonds. Then all of a sudden, you might have 70% in stocks because they’ve grown and then bringing your bond portfolio down to 30%. So, now you have a 70/30 allocation. You want to rebalance it to bring it back to 50/50, which would be in this example, your target or desired allocation.

While there’s no required schedule for rebalancing a portfolio most recommendations are to examine the portfolio the allocations at least once per year. It’s possible to go without rebalancing a portfolio but it’s not advisable at all.

Rebalancing gives investors the opportunity to sell high and buy low thereby taking the gains from the high performing investments and re investing them in areas that have not yet experienced such notable growth. Rebalancing is a very good idea. It shouldn’t be done at least once per year. I highly recommend it.

And if you have more questions or comments, please do so below if there’s a topic on which you would like me to do a video, please also let me know. Thank you again for stopping by, Tina Anders, Anders wealth management in your corner always.

Why Should You Diversify Your Portfolio?

by Tina Anders | Sep 21, 2020

Hi there, and thank you for stopping by today. Today we’re going to talk about diversifying a portfolio and the importance of doing so. My name is Tina Anders and I am the fee only Certified Financial Planner for my firm here in Petaluma, California, serving primarily counties of Sonoma and Marin. Thank you again for stopping by.

So, let’s talk about diversifying a portfolio and why it’s important. Diversification of a portfolio is really just spreading your risk across different types of investments. The goal being to increase your odds of investment success. It’s important in investing because markets can be volatile and unpredictable. Think about COVID volatility, think about 2008. Diversification is very Important.

So, what is diversification? Diversification is holding investments which were will react differently to the same market or economic events. So, for instance, when the economy is growing stocks tend to do well. They outperform bonds typically, but when stocks slow down bonds often perform better than stocks. So, when you hold both stocks and bonds, you reduce the chance of your portfolio taking a big hit when markets are volatile. Again, think COVID, think 2008.

What are the benefits of diversification? You are able to minimize the risk of loss to your overall portfolio. You are able to expose yourself to more opportunities for returns and you’re able to safeguard yourself against adverse market cycles. And of course, you’re able to reduce performance volatility. Which I don’t know about you, but when it comes to financial peace of mind, I know it’s important to be diversified.

So how do you diversify your portfolio? Well, there are several ways to do so. But the same rule always applies. Each investment in your portfolio should serve a different function. For instance, for stock diversification, you may have an S&P 500 index fund for exposure to the United States large cap stock market. And you should could also have another investment focused on small cap stocks. You’d also want domestic companies and international companies because you want to take advantage of all the growth out there.

Now for your bond portfolio. It should be similarly diversified across long term, short term bonds. Corporate sovereign debt and of course high quality bonds to help reduce your volatility risks.

So, I tell my clients that diversification is of the utmost importance when it comes to building a high quality portfolio built for market gains and wealth preservation.

If you have comments, questions or a topic on which you would like me to do a video, please comment below and I will do my very best to accommodate you. Thank you again for stopping by today. Tina Anders fee only Certified Financial Planner in your corner.