As a follow to our discussions regarding Asset Allocation and your savings or wealth, I would like to revisit the subject briefly to emphasize its importance. There is no “one size fits all” when it comes to diversifying and allocating your savings amongst various investments. The most suitable asset allocation for you depends on your personal goals, objectives, and comfort with risk. Having said that, a proper allocation of your savings is the keystone to ensuring your financial needs are met.
As a Portfolio Manager & QAFP, my goal is to help you determine the correct “recipe”.
Why not put all of my money into real estate, it seems to do nothing but go up? It is hard to sell off a bedroom to fund your child’s education.
With interest rates so low, why would I buy a bond? You may need to fund an upcoming expense such as next year’s retirement income?
Why not just put it all into good quality dividend paying stocks? When the market goes down, so do these stocks and if you have no cash available to “buy low” then you are at risk.
What is the right balance then? That depends on your personal circumstances and needs, thus we need to create a Financial Plan for you.
In a world where outside forces unexpected events can “rock your world” it is best to have a Financial Plan in place that keeps you safe and secure knowing that your lifestyle will not be interrupted. As Mike Tyson says, “Everyone has a plan until you get punched in the face.”
Twenty four months ago we felt stock prices were a bit “rich” and moderation might be the order of the day (see blog August 2019). Hence we reviewed your asset allocation to ensure the allocation was inline. Six months later the stock market experienced a correction and you were in position to take advantage of that. As always, “It is tough to make predictions, especially about the future (Yogi Berra)”.
Please contact our office to discuss a plan that fits your future or to request your copy of “RBC Asset Allocation Guide.”