Investors are asking, how should I invest my retirement portfolio with the upcoming Presidential Election? This is the time many investors can become seduced into the notion of “beating the market”, or reaping “windfall profits” from moves in certain sectors and/or stocks in the securities market. Unfortunately, market pundits supported by academic research would have investors remain vigilant by following their asset allocation strategies they developed through the use of a personalized investment policy statement. Based on an investor’s personalized investment policy statement investors can determine the optimal mix of foreign and domestic, large, mid and small cap stocks and bonds based on the risk tolerance and investment time horizon which is designed to deliver predictable results.
Asset Allocation Strategy
The adherence to an asset allocation strategy would keep investors from chasing the next “hot” sector expected to benefit from the Presidential Election results. Professional financial advisors are educated and trained to understand that changes in market circumstances, including election results, are random events which have understandable consequences that are still, nonetheless, unpredictable. So why is this so important for investors to understand? Because the construction of asset allocation models is designed to capture any potential investment returns available across all asset classes over time without any uncompensated risk.
Keep Your Balance
Investors should remain balanced through market events, such as Presidential Elections, to capture investment returns, without losing your balance? During election season, stay consistent over time, by checking your investment policy statement to make sure your goals and risk tolerances have not changed. Next, rebalance your portfolio allocations to comply with your asset allocation model which forces you to remain disciplined while risk remains more constant through changing times. If circumstances, attitudes or new perceptions have changed your investment objective, risk tolerance, or investment time horizon, these changes should be incorporated into the investment policy statement and in turn, the asset allocation strategy.
True North Financial Advisors provide a wealth management platform to its clients to help track investment allocations and periodically rebalance your portfolio over time to help meet your financial plans. True North Financial Advisors provides personalized financial planning and investment management services through the help of a Certified Financial Planner® professional to individual, trusts and closely-held business in Boca Raton and throughout Palm Beach County.
