It’s hard to be ready
for the journey when you
ignore the road ahead…

Road conditions are paramount to any journey.  People prepare by periodically maintaining the upkeep of their car’s fluids, brakes and tires.  Because the best way to handle unforeseen events is to proactively prepare.

Your investment portfolio is no different.  The road so far has been smooth.  We have experienced a “boom” market  for an unprecedented number of years.  However, we all know that cannot continue forever.  Markets traditionally go up and down – and just like road conditions, they can change without warning.  And, just like these unpredictable road conditions, you don’t want to react when it is too late.

NOW is the time to stress test your portfolio to see how you would react to a significant market downturn.  Everyone likes to take investing risks when the market is up, but how much are you willing to lose on those risks when the market has a downturn?

  • When was the last time you looked at the potential risk for your portfolio? Do you know the amount of risk you are comfortable taking or how you will handle market uncertainty?
  • A stress test should be done periodically to make sure that your portfolio is in line with your goals and financial  “comfort zone”.  Things like age, income, and big financial changes all play a part in your personal level of risk tolerance.  A young investor in his or her early 30’s might be more aggressive with their portfolio than a seasoned  investor in their 60’s. Verify that your portfolio matches your level of risk.
  • Our Investment team here at WealthEdge® can analyze  your portfolio against different scenarios to show you how much you would be set to gain or lose – helping you see exactly what portfolio model best fits your comfort zone right now.

We cannot predict the future and we aren’t sure what the road conditions are ahead, but we can help you become aware of the risks you will take with the portfolios that you currently have if another financial crisis were to happen.

We will thoroughly examine each of your investment accounts, breaking them down into their components (stocks, bonds, cash and other).  This will give you a clear display of whether your investments are in-line with your market tolerance.

We will find your Risk Number (a measurement of how aggressive or conservative your portfolio’s allocations truly are).  We will discover the Correlations among all of your portfolio holdings and clearly label all of your holding based on various equity sectors  – showing you exactly how diversified you may (or may not) be.   And lastly, we will perform a Stress Test – demonstrating to you EXACTLY what you would stand to lose if a financial crisis were to occur.

After this detailed analysis, we will offer suggestions on how to adjust current holdings to most accurately adhere to your risk tolerance – better preparing you for the twists and turns in the road ahead.

Because ultimately, a smooth journey is the desired goal, for road trips and for investments.