Creating a Financial Strategy
Barb Finnerty’s role and responsibility as a comprehensive financial planner is to help clients identify where they are now and provide options on how to achieve their goals. Along the way, and with the help of the Exceptional team, we help clients manage their emotions, expectations and make decisions using a sound Financial Planning Process. Prudent investment decisions and regular investment management will increase overall effectiveness of your assets, moving forward. A regular rebalance can be beneficial to ensure you are taking advantage of all products available to you. It is advisable to maintain balance between liquid and non-liquid assets as you come closer to drawing a retirement income from these sources.
Asset Allocation, Diversification, Simplification, Quality, and Prudent Investment decisions help to provide a consistent rate of return for a long period of time while potentially mitigating risk. With a disciplined Financial Plan and Wealth Building strategy we can mitigate risk, and maximize returns while reducing portfolio volatility over the long term.
We recommend an investment review to explore the five components of investment selection.
The five critical areas that need to be reviewed are:
- Asset allocation (cash, fixed income, and equities);
- Style mix (value vs. growth);
- Market cap mix (small, mid, and large sized companies);
- Geographical mix (Canada, US, International).
- Sector breakdown (technology, health care, financials etc)
Asset Allocation: The difference between cash, fixed income and equities. Are you a conservative, moderate, or aggressive investor?
Style Mix: Value investments tend to perform better for you in times when the markets are down. Growth investments tend to make more profit when the markets are in a growth stage.
Market Cap Mix: This area of investing looks at the size of the companies you hold in an investment portfolio. The size of certain companies dictates when expansion can happen and of course affect the growth of those companies. For example, small sized companies tend to perform very well in growth periods of the economy because they are attempting to increase their size in their particular industry. Whereas large, stable companies (blue chip) tend to protect your portfolio in a declining market. It is wise to have small, mid and large sized companies when you are building a diversified portfolio.
Geographical Mix: With Canada only controlling roughly 3% of the world’s economy, it is imperative to have investments in other countries as well.
Sector Investing: This last section reviews the types of industries you can invest in, and can be very specialized.
Please note: Your personal financial plan should help dictate a portfolio mix that meshes with your goals. If you know in advance what you are trying to achieve, then the proper investment options can be provided to help you reach that particular goal.