Good Financial Reads: How to Diversify and Rebalance to Manage Risk

5 Investment Considerations for Business Owners in Down Markets

by Grant Bledsoe, Three Oaks Wealth

The recent increase in interest rates has resulted in lower asset prices across the board. For investors, it’s always beneficial to be aware of ways to minimize the impact of unfavorable market conditions. In this episode, Grant dives into 5 investment considerations that investors can take to protect their investments in down markets and how to benefit from tax planning opportunities that arise in times of low business profitability.

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How Often Should You Rebalance Your Investments (And How To Do It)

by Craig Toberman, Toberman Wealth

Whether new to financial literacy or simply brushing up on skills, you must consider rebalancing your portfolio. This practice keeps your investments working efficiently, making you more money and potentially helping you avoid certain risks.

Here we’ll guide you through the ins and outs of rebalancing your portfolio, including when you should do so, factors to consider, and what steps you’ll need to take to ensure it’s a worthwhile endeavor for you. 

Understanding Investment Portfolio Rebalancing

Let’s break it down. Your portfolio contains your assets- stocks, bonds, cash, real estate, ETFs, cash alternatives, etc. These are all working for you as investments to grow your money. 

You may hear the term “asset allocation” thrown around when discussing financial portfolios. Asset allocation is the concept of the initial balance you aim to achieve when creating your portfolio, diversifying the assets to manage the risk versus reward possibilities, and allocating certain funds according to what you value or want to see grow. 

When you go to rebalance your portfolio, you’ll have to re-assess the “weight” of all of these in detail and how things could be restructured to put you in the best position.

Rebalancing them is critical because, over time, the value of these assets can be affected by anything from the market to the value of that particular asset (i.e., real estate) to an economic downturn- and beyond. The practice of rebalancing your investment portfolio helps you maintain your predefined risk profile through up and down markets.

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Why is Portfolio Rebalancing Important for Executives and How To Do It

by Sweta Bhargav, Adviso Wealth

We’ve all met people at social gatherings who love sharing their investing success. 

For most financial planners, a red flag often pops up as we listen to the stories of gut-feeling stock picks and the golden investment tidbit that slipped out at a cocktail party.

Usually, several questions creep up:

1. What analysis did you use to make your decision?
2. What made you stay invested and not capture your gains and rebalance?
3. Can the investment decision-making you used at that time be repeated?

Whatever your investment philosophy, we will explain why it’s important to rebalance your portfolio and how to do it.

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How To Diversify Your Portfolio As A Small Business Owner

by Craig Toberman, Toberman Wealth

Your business is your pride and joy. You’ve spent years putting in countless hours, physical labor, and passion into creating something successful. But labor and love aside, there’s something else you’ve likely put into your business—your personal wealth.

Do you know just how much of your net worth is tied to your business? For most, the answer is far too much.

It’s easy (and natural) to direct most of your resources into starting and growing your small business. Now that it’s become a sustainable entity, it’s time to turn your attention towards creating a properly diversified personal financial position.

To help, we’ll review what diversification means and how you can achieve it moving forward.

Understanding Diversification

Diversification is an investment strategy that seeks to minimize risk and maximize return.

The concept is relatively simple. The trick, however, is applying it to your own investments. A lot goes into diversifying an investment, so let’s break it down.

Some may think that investing in a few mutual funds or ETFs will properly diversify their investments, but the problem is those funds may all track similar assets. Come to find out, you aren’t nearly as diversified as you imagined.

To truly diversify, invest in assets from different sectors, markets, economies, geographic regions, and more. Why? Because proper diversification should involve investing in securities (like stocks and bonds) that react differently to varying market conditions.

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