For those who have kids/grandkids, you might be familiar with Kung Fu Panda. Po, the main panda character, was tasked with saving his village from the bad guy. Po was NOT a warrior and during his training he proved that was the case.
It wasn’t until late in the movie when Po, after he conquered the “art of balance,” realized his potential as a warrior. Once he found balance, his confidence soared and he defeated the bad guy to save the village.
It may be a kid’s movie, but it is a study in human nature and relates to investing in the stock market.
when your portfolio is out of balance it puts your money at risk and can leave you with many sleepless nights.
being in balance is a suitability exercise. To determine which portfolios are “suitable,” we focus on the client’s Risk Tolerance (how they feel about risk in the market) and their Risk Capacity (their financial ability to take risk).
We use what we think is the industry’s best risk software which literally gives a client their own personal “Risk Score.” This is done by using a questionnaire that can be completed in less than five minutes. If you would like to find your personal Risk Score, click here.
Scoring portfolios—we also score the risk of a client’s current portfolio to see if it’s in balance with their personal Risk Score. Many times it is not and then we design a portfolio that is “in balance.”
Most consumers come in with a personal risk score of between 30-50.*
Example of being OUT of balance—let’s assume your personal Risk Score is 45. If we assume your portfolio is heavily growth-oriented, it could have a Risk Score of 60, 70, 80+.
These risk scores would call into question the suitability of the portfolio and, on its face, the portfolio is not in balance with the personal Risk Score.
Example of being in balance—if we assume you have the same Risk Score of 45, we would look at our model portfolios and find one that also has a Risk Score at or near 45. This would be in balance and you could feel good about the risk you are taking to generate the returns you are looking for.
2) Get us a copy of your brokerage account statement that shows your investment holdings. We can score that in a matter of minutes to determine the Risk Score.
Or if you would simply like to get on the phone to discuss your current situation, email us at firstname.lastname@example.org or give us call at (888) 892-9882.
*Data provided by OnPointe Risk.