Is Your Current Asset Allocation Still Appropriate?

As the stock market continues to reach all-time highs, we want to encourage you to review your investable assets to make sure your asset allocation is still appropriate based on your goals and risk tolerance.

You may be asking yourself what you can do in today’s environment. We have outlined a handful of important steps:

  1. Review your investment goals and objectives, time horizon, and tolerance for market volatility. One’s financial picture and priorities can change over the years. It is best to optimize your asset allocation accordingly.
  2. Stay diversified across multiple asset classes and securities. Diversification amongst uncorrelated asset classes can provide downside protection during market corrections.
  3. Own quality assets. For example, we seek companies that have strong competitive advantages, strong balance sheets, and generate a lot of cash.
  4. Allocate to riskier assets only when you are being properly compensated to take on the additional risk.
  5. Temper return expectations going forward. Over the last decade, the US stock market’s average annual percentage return has been in the double-digits, significantly above its historical high-single-digit average annual return. This recent trend is not likely to continue forever, and returns over the next decade are likely to be more modest. In fact, some large institutional investors are forecasting mid-single-digit returns over the next ten years.

If you have questions on any of these above-mentioned steps and how they can be incorporated into your financial plan, please feel free to give us a call.

In the meantime, if you haven’t already done so, a great first step is to complete and return our *Risk Assessment document. We can then schedule a meeting to have an in-depth conversation about your asset allocation and address any financial planning questions you may have.

We take pride in working with our clients to help them achieve their financial goals, regardless of the macroeconomic environment.

All the best,

Your Team at Gamble Jones

*If you need the Risk Assessment Document please call 626-795-7583 or email us.