Generally, I recommend you leave the construction of your investment portfolio to your professional investment advisor at The LWP Group, especially if you are investing a significant percentage of your total wealth, or if you're relying solely on the success of your portfolio to meet your future financial goals. However, whether you or your LWP Group advisor designs your portfolio, consider a few of these well-recognized guidelines.
The term "time horizon" refers to how long you plan to keep your money invested. Your time horizon affects your portfolio design because the longer you plan to keep your money invested, the easier it is for you to ride out dips in the market. You may be able to tolerate more volatile investments, with potentially higher returns.
Your personal risk tolerance also affects your portfolio design. Can you sleep at night knowing that a sudden downward shift in the market could cost you a significant portion of your principal? If not, a portfolio that holds a high percentage of aggressive growth stocks, for example, is not right for you. You should match investments to your personal level of risk tolerance.
Your personal liquidity needs may eliminate some of your investment choices. If you periodically need access to your investment dollars, it makes no sense to design a portfolio dominated by assets that can't be readily sold. Instead, you'll need investments that can be converted to cash easily and quickly.
The LWP Group is Here to Help
At the LWP Group, we're here to help you with all your financial planning needs. Including working with you to select the right portfolio options that work within your overall plans. Visit our website www.TheLWPGroup.com or simply give us a call with any questions you may have. (734) 424-1700