Balanced Financial Portfolio

What does a well – balanced financial portfolio look like today? I remember back in August 2014, when I initially began learning about asset accumulation. I listened to our team leaders on how to go forward and basically, we were told what and what not to do as far, as protecting our money went and being very new to the industry I listened.

Back then we were told not to invest in the stock market and to put all of our money into the Gold. This did not sit right with me, nor many of the professionals in the business of financial planning. (“I don’t think the basic asset classes should be discarded,” echoes Certified Financial Planner John McAvoy of Waterstone Retirement Services in Canton, Mass. “But I don’t think they are sufficient to diversify a portfolio in today’s environment).”

Therefore, I listened to my gut and only invested enough into Gold to feel protected and left the rest in well-diversified funds, within the stock-market and behold it grew. No matter what the stock market did in the grand scheme of the ups and downs; my portfolio still grew. I decided to start adding back into my IRA.  Now I have: Cash, Stocks, (Gold and Silver), for inflation protection and which could be liquidated on short notice.

How many other financial items did I need to round out a well-balanced portfolio?

Stats:The moderately diversified portfolio had 65 percent of its assets in large-company U.S. stocks and the remaining 35 percent in a portfolio of U.S. bonds. The second portfolio allocated just 45 percent of its assets to large U.S. stocks and 30 percent to domestic bonds. It also put 5 percent in international stocks, 15 percent in commodities and 5 percent in real estate.”

“In 2008, both portfolios lost money — 22.2 percent for the moderately diversified portfolio, 26.7 percent for the broadly diversified portfolio. In 2009, however, the broadly diversified portfolio won the race, earned 21.1 percent versus 19.3 percent for its more pedestrian competitor. More impressively, over the 10 years ending December 31, 2009, the broadly diversified portfolio grew by an average of 4.5 percent annually versus 2.2 percent for the other portfolio.”

“The typical investor today, should start with a globally diversified portfolio of stocks and bonds plus a modest allocation to cash, and then consider adding real assets such as real estate, commodities, and Treasury Inflation-Protected Securities, or TIPS.”

**Overall, an investor should keep his or her risk appetite in mind (meaning never invest more than you are able to lose comfortably. Do not risk your mortgage or rent payments. Be globally minded across multiple asset classes.” (Including now the digital-cryptocurrency space).

 

 

 

References:

Ja’Nala Mamdu, Wealth Acquisitions Strategist., Ja’Nala’s Generational Wealth LLC.
Michael O’Keeffe, CIO., for Merrill Lynch Wealth Management, a unit of Bank of America Corp.
John McAvoy: Waterstone Retirement Services.

**Disclaimer: Ja’Nala Mamdu, Owner of JGW,  is not a professional financial planner, nor tax agent.
My experience comes from reading and doing what the wealthy do.

Ja’Nala’s Generational Wealth LLC.
www.janalasgenerationalwealth.net
gold@janalasgoldmind.info
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