What makes some investment portfolios successful, while others fail?Cliff Broetz, CSA, Wealth Advisor
“Why do some financial advisors reap solid financial gains for their clients, while others see potentially devastating losses?”
These are questions that our advisors hear all the time – and if you haven’t asked your financial advisor these questions, then you should. The answer to these questions, the difference between investment success and failure, is smart investing. Your wealth isn’t just about money, it’s about protecting and nurturing the things that matter to you. Before any investment is recommended for your portfolio, it must pass our seven step investment planning process. Checking each of these boxes before you make an investment decision will help to ensure your investments are as smart, safe and secure as possible.
When you’re choosing the right funds for your portfolio, they shouldn’t directly reflect the index – especially when you’re paying for active management. These actively managed funds should outperform the index on an annual basis. Don’t settle for less.
Funds that are successful long-term aren’t managed like quick stock trading opportunities. The funds with the highest performance are almost always those with a lower turnover.
Where will that fund be putting most of your money? When funds concentrate holdings on their best and strongest ideas, the investment returns are almost always higher. If the money is scattered around, it can indicate a lack of strong management or uncertainty.
Lower Fees – Tiered Pricing
Your returns shouldn’t be mitigated by fees and surcharges. It’s important, then, to remember that returns aren’t the only thing that matter when you’re looking at a new investment. Fees matter, too, because they can cut significantly into your returns.
Non-formula Based Investing
You’ll get the best investment ideas and portfolio planning from a skilled, experienced financial advisor who knows your needs – not from a computer. Some funds base their investing on computer algorithms alone. At Precision Wealth, we believe that your investments should be based on strong values and proven business principles derived from real people.
You lead a busy life, and don’t have time to make decisions every day about your investment portfolio. Fortunately, your financial advisor does – after all, it’s our job. When your advisor has the ability to make smart and timely currency decisions on investments, you can take advantage of unique and lucrative financial opportunities as they arise.
The taxes associated with different investments can be complicated and expensive, but the right knowledge can reduce your tax liabilities and protect your investment income. By keeping the tax liabilities of every decision in mind, your portfolio receives another layer of protection.
This planning process provides a great framework for smart investing. No matter where or how you invest, it pays to consider each of these seven investment aspects before making any investment decision.