How to construct a portfolio of investments

How to construct a portfolio of investments

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There is no such thing as an “all-in-one” investment approach. That is because you invest to accomplish the goals that are most important to you. That is why your local financial advisor will take the time to understand your objectives fully and then collaborate with you to design a customized financial strategy. Before making investment recommendations, we ask the right questions to ascertain your objectives, life stage, and risk tolerance.

The methods below might assist you in identifying a Portfolio Objective that you and your financial advisor can use as a jumping-off point for constructing a portfolio that is precisely tailored to your needs.

1. Consider your current state of life.

It’s critical to understand the impact of your life stage on your financial condition. For instance, if you’re younger and retirement is still several years away, your investments would likely look different than if you intend to retire in five years.

We’ve identified five distinct investment periods of life: three “accumulation” phases for retirees and two “distribution” phases for those already retired.

The Stages of Accumulation. Given that the average investor will spend more than two decades in retirement, these stages are a vital first step toward wealth accumulation and are commonly defined as follows:

  • The Formative Years of Investing- When you begin your first full-time employment.
  • Years of Good Earnings- When you have 10 to 20 years until retirement.
  • Years of Increased Earnings and Savings- When you have up to ten years until retirement.

The Stages of Distribution. Given that retirement might last approximately as long as accumulation years, analyze how money is allocated throughout the following two stages of retirement:

  • Early Retirement Years- When you still have at least 15 years of retirement income to rely on your investments.
  • Late Retirement Years- When you have less than 15 years to draw retirement income from your investments.


2. Determine your comfort level with risk.

Your risk tolerance, or the amount of risk you are comfortable facing, is critical for selecting appropriate investments. Different sorts of investments involve varying degrees of risk—but also offer various degrees of possible reward. Strike a balance between the risk you’re willing to take and the expected profits. Then, regardless of how the market performs, you’ll be in a better position to stick to your investment strategy. Before implementing any process, your financial advisor will lead you through a series of questions to ascertain your risk tolerance.

3. Define your portfolio's purpose

A Portfolio Objective assists you and your financial advisor in determining the appropriate mix of investments for you. Any one of the five Portfolio Objectives may be suitable for your long-term objectives and specific financial position. As a guide, refer to the Portfolio Objective Guidance Table below. To begin, locate your life stage at the top. Then, using the descriptions on the right, determine your risk tolerance.

Portfolio objectives related to your life stage and risk tolerance may make sense for your situation, mainly if your principal objective is retirement income. However, keep in mind that this is only the beginning of your discussion with your financial advisor. You and your advisor will review your objectives, risk tolerance, and overall economic condition to develop an appropriate portfolio for your circumstances.

How we can assist

You’ve spent your entire life saving for retirement. Consult your WAG Consulting financial advisor first to ensure you’re on course to achieve your objectives, and then begin enjoying the life you’ve been planning.

How we can assist

Your financial advisor will assist you in developing a tailored investment portfolio and ensuring that each component fits within the context of your retirement and other financial goals.

Due to market volatility, your investments may not always remain consistent with your initial investment mix. Additionally, your financial objectives or existing circumstances may change. That is why your financial advisor will work with you to examine your portfolio regularly and make any required adjustments.

Speak with a WAG Consulting financial advisor in your neighborhood today to begin developing a strategy that is the “perfect fit” for you.