Guide to Investments and Constructing a Portfolio

Finance | Provided by Cornerstone

Recorded Session Led by Cornerstone Advisors

Whether you are a seasoned investor or it’s all Greek to you, this is your opportunity to join our own Katie Robinette, CFA and Sue Peterson, CFA as they review various types of investments, shed light on different types of risk, and lay out the steps to constructing a portfolio and best practices to navigate through market volatility.

 

Sue Peterson Katie Robinette

Q&A From the Session:

Q: Why not just have your portfolio 100% in cash because it never goes down?

– It takes a level of risk to make money.
– Foundation of liquidity is important, but if that’s the only thing you own, you are exposing yourself to purchasing power risk. That means that due to inflation, your dollars are gradually worth less and less each year in purchasing power.
– Since the purpose of investing is to make sure you have the money you need to do the things you want, you have to at least keep up with inflation so you can keep buying the items you want and need in the future.

Q: What are the key investment objectives I should address before constructing my portfolio?

– How much liquidity do you need or want on hand to cover living expenses or emergencies?
– Do you need or want cash flow? If so, how much?
How long until you want or need to access these dollars? We call that your investment time horizon. It won’t be the same timeframe for every dollar. For example, you might owe tuition or a tax payment in 6 months, want to buy a bigger home in 5 years and then plan to retire in 25 years.
How much market risk can you stomach? Even recognizing that you likely won’t just own stocks, when the stock market drops 30%, like it did in March, it’s important to think about your response. Would you be able to sleep at night? Would you want to sell in a significant downturn or would you see it as an opportunity to buy?
– Can you afford to own something that isn’t immediately liquid?

 

Looking Forward: Financial Education Webinar Series

Preparing for the Unexpected
Investments 101
Estate Planning 101
Advanced Estate Planning

 

 

Have a question or interested in continuing the conversation? Send us a note to info@buildbeyond.com.

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