Asset Class Investing
In this episode, John Smallwood of Smallwood Wealth Management discusses returns on asset class investing and the value of a diverse portfolio.
John is the author of 5 Ways Your Wealth is Under Attack. He has lectured extensively on financial planning and has received the Five StarSM Wealth Manager Award for 2011, 2012, 2013, 2014, 2015 and 2016.
John’s strength lies in his ability and commitment to continually improve the level and quality of the financial planning process. His dedication to his clients’ growth involves an evolving strategy that strives to meet the demands, desires, and needs of his clients in a continually changing economic environment.
In this episode, you will learn:
- How to read BlackRock’s chart of asset class investments. (Think of it like the Periodic Table of Elements―it’s the Periodic Table of Investments.)
- How to adjust your investments to help reduce volatility over time.
- How to avoid chasing the best return for the previous year or the previous quarter, or the top-performing mutual fund, or whatever that asset may be.
- John’s key insights from a close reading of the chart:
- Risk levels change depending not only on asset class, but time frame.
- The higher the volatility, the lower the return in the long term.
- There is a lot of volatility in the top-performing asset classes. When you take a diversified approach, you’ll be in the middle of the road in terms of performance, but will have low volatility.
- In constructing a portfolio, since it’s impossible to predict which asset is going to outperform the asset class of the previous year, the goal is to diversify the assets to give you exposure to all classes, so that you get to that middle of the road position.
At Smallwood wealth, we know that your strategy for asset class investing needs to be put in context with your entire financial strategy. We want to help you come up with the right mix in a diverse portfolio that meets your long-term goals. Give us a call at 732-542-1565 or go to schedule an appointment. We look forward to speaking with you.