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Michael A. Milazzo, CLU, ChFC
Registered Principal
The Meridian Financial Company
3350 Club Villas Dr SE, Unit #1303
Southport, NC 28461
Phone: 631-979-4223
Fax: 910-854-0002
Email: meridian@ae.cadaretgrant.com
Website: www.merfinco.com
November/December 2017
Your asset mix - bring it back in line
What have your investments been up to lately? Maybe some of them have performed really well. And maybe some took a swan dive. Either way, your asset allocation may now be out of whack.
What can you do about it? Rebalancing helps you restore your asset mix to the percentages of stock, bond and cash alternative investments you originally chose when you set up your account. And if your feelings about risk have changed, rebalancing can help bring your asset allocation in line with your current risk tolerance.
Why rebalance?
You may have selected your investment mix based on an overall financial plan or strategy that you and your financial professional created to fit your investment time frame and risk tolerance. But your asset mix can become unbalanced when one type of investment rises or falls significantly in value. Investments that have made substantial gains may make up a larger portion of your portfolio — and expose you to more risk — than you intended. Or, if some of your assets have dropped in value, your portfolio may not be earning returns that will allow you to pursue your investment goals. Reviewing your investments’ performance can help you determine what steps, if any, you need to take to get your portfolio back on track.
Rebalancing options
One way to rebalance your portfolio is to direct a larger percentage of your new contributions to the asset class that’s currently underperforming.
Another strategy is to sell investments in the asset class that’s doing well and buy investments in the classes that are struggling. While you might be hesitant to sell investments whose values are rising, remembering that you chose your asset allocation to reflect your goals, time horizon and risk tolerance can put rebalancing in perspective.
Consider reviewing investment performance annually, semiannually or even quarterly. That way, you’ll be able to make any changes needed to help ensure that your portfolio continues to reflect your investment objectives.
Rebalancing may have tax consequences if done outside of a tax-favored retirement account.
FINRA Reference FR2017-0620-0124/E
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Securities and Advisory Services offered through Cadaret, Grant & Co, Inc, a Registered Investment Advisor and Member FINRA/SIPC. The Meridian Financial Company and Cadaret, Grant & Co., Inc. are separate entities. I am registered to sell Securities in the following States: NY, NJ, PA, NC, FL, ID.
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