Pension Parameters Financial Services: Are Your Investments Growing? How are they positioned?

Wednesday, November 30, 2011

Are Your Investments Growing? How are they positioned?

6:10 PM |

Posted by pensionfinancialservices |

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In our one-size-doesn’t-fit-all philosophy, we work with our clients to make certain that they can sleep at night and understand how their retirement investments are working. It’s important to gauge how aggressive or risk-adverse you are when you take your position in a retirement plan. And that you understand that you have the right and ability to change your position based on your own educated judgment about your performance. We are here to help to understand what is happening and why.

Most people do not understand that a too-conservative investment strategy can be just as dangerous as a too-aggressive one. It exposes your portfolio to the erosive effects of inflation and limits the long-term upside potential that diversified stock investments offer. On the other hand, being too aggressive can mean undue risk in down or volatile markets. What can help is a strategy that seeks to keep the growth potential for your investments without too much risk. We help you achieve that.

The way this is done is by an asset allocation strategy that matches your tolerance for risk and need for return potential. A conservative mix seeks to minimize fluctuations in market values by taking an income-oriented approach with some potential for growth and includes some stocks or stock funds because growth will still be important—particularly during one’s earlier retirement years. With retirement likely to span 30 years or so, you’ll want to find a balance between growth and preservation.

Consider creating a diversified portfolio that includes a mix of stocks, bonds, and short-term investments, according to your risk tolerance, overall financial situation, and investment timetable. Doing so may help you seek the growth you need in a way that lets you sleep at night. Diversification/asset allocation does not ensure a profit or guarantee against a loss.

Pension Parameters not only begins each relationship with a review of possible allocation strategies, but each year we update your allocations by talking with you about past performance; what’s happening in the world right now; and your own life plans.