Should you get a second opinion?
As you get older (also wiser!) your needs and risk tolerance usually change. It is wise in my opinion to have your portfolio looked at, at least once a year. I like to make the analogy of visiting your doctor once a year for a check up to making sure everything is ok and the same should go for your portfolio being reviewed once a year just to make sure it’s in line with your expectations. Having a second set of eyes even if that’s a second financial advisor would be worth your while.
When you first had your portfolio put together you may have been in a different stage in life. In that stage of life you may have been ok with having a higher degree of risk. Today your goals may have changed as you are in retirement or near retirement or just don’t feel the same about risk any longer. It is crucial to make adjustments to your portfolio as your risk tolerance changes. Risk today looks much different than it may have looked even 10 years. As market environments have changed and interest rates have dropped (and may potentially go up soon), portions of your portfolio you once thought were “safe” could have exposure to bigger risks than you think.
Should I rebalance my portfolio?
Over the course of a year markets go up and down and experience turmoil. In many diversified portfolios you may have exposure to different asset classes along with different weighting and percentages. When you originally sat down with your financial advisor, there may have been a strategy implemented with a target allocation. If this isn’t monitored on a regular basis as the portfolio goes up and down it will get “out of sync” and will most likely need a rebalance to get it back to his target allocation. There is plenty of data out there that recommends to rebalance your portfolio usually on an annual basis to prevent over exposure (weighting) to assets classes you don’t want as part of your longer term plans.
My objectives have changed and I need more income!
I also would like to bring up how market conditions can affect even the most conservative investor. As markets go through cycles and interest rates change, this can have a dramatic effect on the investor. Not too long ago investors could go to the nearest bank and purchase a 5% CD. With interest rates being rock bottom and investors still looking for income they have to turn to other options to meet those income needs. As market conditions have changed and the needs of individual investors have changed, new products have been created to address many of those needs. One of the biggest issues to address is how to get more income safely in a low interest rate environment. I would recommend to anyone looking for income to consult with me as there are many more options available today. Please consult with me on options that may make sense for you.
Please call or email us for a free consultation or financial second opinion by
Richard London Financial.
Las Vegas, NV 89148
Phone: (702) 318-1376