Navigating Volatility: The Value of Risk Management in Maintaining a Successful Long-Term Portfolio

Liberty Wealth Advisors |

Market volatility can be unnerving and stir up a lot of emotions, but there are some evidence-backed approaches that can help keep your portfolio on track to achieve your long-term financial goals. Risk management - the act of identifying your level of risk tolerance and working to maintain that in a portfolio1 - is a key component of a successful long-term portfolio. It is particularly powerful when applied to a globally diversified portfolio. Working alongside a trusted financial advisor can help you develop and maintain a plan for your portfolio that takes into account your ability to tolerate risk through all market conditions.

Risk Management

Risk Management represents one of the most important factors in maintaining a successful long-term portfolio.

It’s easier to stick with a plan to achieve your financial goals that is tailored to your personal level of risk tolerance with consideration for your long-term goals. Maintaining a portfolio in line with your risk tolerance better enables you to remain invested through all market conditions. Keep in mind that nobody can predict the future. The best investment strategy to achieve your long-term financial goals is an asset allocation you can maintain through all market conditions.

Investing is an emotional endeavor. We recommend working with trusted financial advisors, like the team at Liberty Wealth Advisors®, to build a portfolio in line with your level of risk tolerance so that you can remain invested through all market conditions and achieve your long-term financial goals.

Global Diversification

We believe in the evidence-backed benefits of a globally diversified portfolio.2

Work with your trusted financial advisor to develop a globally diversified portfolio that is in line with your risk tolerance. Consistent returns from a broadly diversified portfolio designed to achieve your long-term financial goals can be greater over time than intermittent returns from a narrow and specific portfolio.3

Maintaining a low-cost, tax-efficient portfolio can also help improve returns over time compared to a portfolio with a higher expense ratio.4 There is no additional risk incurred in maintaining a low-cost, tax-efficient portfolio, but there are financial upsides. These upsides can include higher long-term gains, less risk from market volatility, and a higher confidence in your investments.

Moreover, high fees can negatively impact long term performance as they compound over time. A low-cost portfolio can improve returns over time.5

Maintain Your Strategy with the Help of a Trusted Financial Advisor

The best investment strategy for you is one you can maintain through all market conditions. Because investing is an emotional and time-consuming endeavor, it can be incredibly beneficial to work towards your long-term financial goals with a trusted financial advisor. Not only can they help you ascertain your personalized level of risk tolerance, but they can help you build an appropriately diversified portfolio that you can stick with through all market conditions, helping you to achieve your long-term financial goals.

Liberty Wealth Advisors® takes pride in serving you by offering a full range of wealth planning services designed with your unique needs in mind. To learn more about the importance of risk management and diversification, and about how to achieve your long-term financial goals, email us at info@libertywealthadvisors.com or call us at 800-448-3550.

 

 

All information presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service

 

 

1 https://www.blackrock.com/americas-offshore/en/education/portfolio-construction/rethinking-risk

2 https://intelligent.schwab.com/article/long-term-benefits-of-global-diversification

3 https://www.vanguard.co.uk/content/dam/intl/europe/documents/en/quantifying-vanguards-advisers-alpha.pdf

4 https://investor.vanguard.com/investor-resources-education/how-to-invest/impact-of-costs

5 https://investor.vanguard.com/investor-resources-education/how-to-invest/impact-of-costs