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Re-Balancing Your Portfolio Allocations   

In today’s uncertain financial landscape and based on the market run up we have seen in 2017, we believe it is more important than ever to establish a well-maintained portfolio that can help you reach your financial goals. Your portfolio needs to not only meet your need for capital, but also provide you with financial peace of mind.  

While there’s no simple formula to help you figure out how your portfolio should be constructed, determining the right asset allocation should be the first step in the process. In order to properly ascertain your financial situation, there are a few important things to consider: age, time horizon, amount of capital to invest and future capital needs.  

Another important thing to be aware of is your risk tolerance. Would you be willing to risk funds for the possibility of greater gains? While everyone wants to reap the rewards of high returns, not everyone can handle the high stress levels they can cause.  

On the other side, avoiding investment risk isn’t always a wise decision. It is possible for portfolios to be too conservatively constructed, which makes them unable to provide the necessary long-term growth that is needed to outpace inflation and build wealth. Many investors seek absolute safety and keep their money in bank accounts, Certificates of Deposit (CDs) and other financial products without realizing that these “safe” choices may incur their own set of risks.  

These risks include investment opportunity loss and the destruction of purchasing power resulting from inflation. When investors fail to take advantage of returns that a portfolio of growth investments can produce over time, this is called investment opportunity loss. Inflation can also hurt your investments as it is often regarded as the silent destroyer of low-risk portfolios as purchasing power declines over time. 

You need to find the right balance for you – one that satisfies your risk tolerance while also achieving an appropriate amount of growth and income.  

At American Financial Investments LLC, we can help you create a financial strategy that fits your individualized investment objectives and goals. Allow our team to utilize our knowledge and experience to help manage your portfolio during various economic conditions and investment market cycles. Allow us to help you determine your risk tolerance using proprietary surveys, analyzing your finances and discussing your retirement and financial goals in depth.  

We believe that your best bet for steady, long-term growth of your investments is having a well-diversified portfolio. This can help protect your assets from the risks of large drops and structural changes in the economy over time. When you work with the right financial professional, they can help you diversify, make adjustments when necessary and help increase your odds for long-term financial success. QCBN   

By Ronald Stevenson and Barbara Clark Stevenson 


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