Three Steps to Balance Your Investment Portfolio in An Uncertain World

OWNx TeamMoney & Financial Technology

A Smart, Simple Strategy Can Minimize Risk and Maximize Returns

Back in the day, advisers recommended rebalancing your portfolio every year. In today’s rapidly changing investment world, regular examination of your investment portfolio is a must. Depending on your asset allocation mix, you may want to rebalance every three to six months.

Step #1 Assess Your Risk Appetite

  • The degree of healthy risk any one investor is willing to take on depends on many factors.
  • How well can you stomach volatility?
  • How much time do you have before you need the funds you invest?
  • What are your long-term objectives?

Answers to these questions will help you make wise decisions and avoid sleepless nights.

Investors need to consider their time horizon, risk tolerance, long-term objectives, and available capital to develop a strong allocation strategy, as each asset class has different levels of risk and reward. For example, an investor with a short time horizon and low tolerance for risk may feel more secure with a conservative approach, whereas an investor who has a longer time horizon may find an aggressive approach to be more suitable.

Each investor will want to rebalance their portfolio on a regular basis in order to maintain their profile, or change their strategy if their risk appetite changes.

Step #2 Know What You Don’t Know

In other words, be honest with yourself about your knowledge of the markets you’re investing in. More people are taking over management of their investments through online brokerage accounts and self-directed IRA retirement plans. This provides flexibility and control, which is important.

However, the current investing world can be complicated. Technology is moving quickly, disrupting many traditional markets, and of course there is the rise of the ever-volatile cryptocurrency world. Being honest with yourself about your knowledge of the markets will help you avoid investing in areas you don’t understand, and possibly getting caught on the wrong side of disruption or hype. It may mean making a call to a financial advisor – or two.

Step #3 Get it on Your Calendar

This is vital for those who manage their own portfolios. Today’s world is fast-paced, and there are many distractions that could cause you to delay your review. Set aside a specific day (or two) on a regular basis to do two things:

  1. Examine how much the investing landscape has changed. Have macroeconomic or geopolitical events occurred that might impact your allocation strategy? Is more or less risk prudent? Do you need to change your allocation percentages? Get your advisors involved.
  2. Crunch the numbers and rebalance. It’s easy to rationalize leaving things as they are, but if you spend time thinking through #1 and it makes sense to change things, do it.

Precious Metals Play a Role

Physical gold and silver have traditionally been an anchor for any investment portfolio, with an allocation percentage between 5% and 20% depending on risk appetite and global market and geopolitical conditions. In the last thirty years however, they fell out of favor as technology bypassed the industry, simultaneously bringing new assets online. While it became easy for anyone to buy and sell stocks and bonds within an online brokerage account, ownership of physical gold and silver was stuck with 80s technology and a lack of liquidity.

That has changed with the OWNx platform. Dollar-cost average into the gold and silver market until you reach your desired allocation. Buy and sell physical gold and silver as easy as trading stocks and bonds. The OWNx online Dashboard is available to everyone, including for those who choose to hold them within a self-directed IRA.

Understand your risk profile. Know your investing limitations. Set up a schedule and watch your portfolio closely. Then take advantage of today’s ability to bring the time-tested value of gold and silver into your investment strategy with a smart, simple online platform.

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