Often quoted in major national media, Adam is a Chartered Financial Analyst (CFA®), a CERTIFIED FINANCIAL PLANNER™ (CFP®), and has been included on the Forbes Next Gen Best-in-State Wealth Advisors 2019 list. He is a member of the CFA Society of Los Angeles and the CFA Institute. Adam helps establish asset allocation strategy as a member of the EP Wealth Investment Committee, which supports all EP Wealth Advisors and their clients. The Committee’s top-down approach to portfolio construction begins with an outlook on the economy’s likely direction, followed by the implications for different economic sectors and asset classes. This culminates in strategic selection of the individual stocks, bonds, mutual funds or other investments deemed most appropriate for each individual client’s portfolio.
As we’re balancing risk and balancing diversification in our clients’ portfolios, one of the specific things we look for is concentrated positions. For example, a stock may have been amazingly popular and a very good investment over the last several years. Or perhaps you work for the company and have accumulated quite a few shares. But now it may represent too much of your portfolio, or it’s become so overvalued that continuing to hold any shares carries considerable risk. You may have a psychological bias in favor of that stock, or some other hurdle that’s preventing you from selling it and reducing your risk. An objective, independent financial advisor can identify investments such as this that might be problematic, and help you take whatever actions may be in your best interest.
More generally, whatever stage a market may be in, it’s good to take a look at your tolerance for risk and whether your current portfolio is appropriate for that. If you haven’t seen a steep selloff in some time, it’s easy to say, “Yeah—I can handle some risk. I can handle a 20 percent or 30 percent drawdown.” But can you really? In many cases, we find that when people actually see some volatility, they realize their risk tolerance wasn’t as high as they thought it was.
Or perhaps the market is down, and now you’re holding less in stocks—and have less upside potential in a market rebound—than your risk tolerance might support. Regularly reassessing your financial plan, or creating a plan if you don’t already have one, lets you simulate what various market scenarios can actually do to your portfolio. Sometimes seeing this can go a long way toward helping you make the right moves so you don’t make potentially costly missteps when the market throws you a curve.
With a staff of professionals and access to sophisticated analytical tools, EP Wealth offers a comprehensive range of services to help you invest with greater insight, as well as develop a holistic wealth management strategy. To discuss your finances and investment goals, we invite you to contact one of our advisors.
This is #2 in the Informed Investor “How to Build Your Investment Portfolio” series. Other topics include Asset Allocation, Why We Diversify, How to Buy a Stock, How to Buy a Bond, Concentrated Positions, etc., etc. For more information on our investment process, check out our investment management page or ask for a Portfolio Review.
The EP Wealth Advisors financial planning process starts with the relationship between you and your financial advisor. How do you value a financial coach? Developing a partnership that ensures we understand your goals lets us help you prioritize and organize your financial decisions—so you can achieve peace of mind and live your life.
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