0 comments on “Asset Allocation is Key”

Asset Allocation is Key

The Modern Portfolio Theory

Asset allocation is the process of determining how your investment portfolio should be invested among the different asset classes, based on your risk tolerance and your financial goals. It involves diversifying or spreading your investments across these asset classes in order to maximize potential returns while minimizing risk.  Simply put, it is the practice of keeping your eggs in different baskets.

Of course in financial matters we are not dealing with eggs.  Instead we are dealing with money.  And to be specific, we are dealing with investments in particular.  Investments come in three basic types or Core asset classes:

  • Stocks
  • Bonds
  • Money Market.

There are also several Non-Core investments:

  • Real Estate
  • Resources
  • Other High Quality Private Investments
*These Non-Core investments usually exist outside of the typical public offerings.

Basically the principal of diversification says that you should have a little in each of these to diversify yourself against risk of the stock market and whatever else might happen in life.

If all your money is invested in one sector of the economy or one region of the world, your investment returns are completely tied to its performance.  By spreading your money around in investments of various kinds (for example – lower risk and high risk; short term and longer term; blue chip and smaller companies), you reduce some of your risk because gains in one area can offset losses in another.  Over the long term, markets over-all have increased in value.  This is the principle behind asset allocation.

The First Step to Asset Allocation – A Plan

Since asset allocation has such a tremendous impact on investment returns, it underlines the fact that developing an investment plan – one that is diversified, and compliments both your investment goals and personal comfort with volatility – is the vital first step in your personal investment strategy.

Once you know what you want to achieve and when, you can decide how to achieve it by selecting the investments that work for you.  Asset allocation helps you create a personalized investment portfolio that manages risk without unduly diminishing returns.  Asset allocation provides the potential for maximum returns with the level of risk you’re willing to accept.

The Efficient Frontier – The Strategic Approach to Asset Allocation

Modern portfolio theory was introduced by Dr. Harry Markowitz with his paper titled Portfolio Selection.  This paper appeared in the 1952 Journal of Finance.  Thirty-eight years later he shared the Nobel Prize in economics with Merton Miller and William Sharpe for what has become a broad theory for portfolio selection.

Prior to Markowitz’s work, investors focused on assessing the risks and rewards of individual securities in constructing their portfolios.  Standard investment advice was to identify those securities that offered the best opportunities for gain with the least risk and then construct a portfolio from these.  Following this advice, an investor might conclude that railroad stocks all offered good risk-reward characteristics and compile a portfolio entirely from these.  Intuitively, this would be foolish.

Markowitz formalized this intuition.  Detailing the mathematics of diversification he proposed that investors focus on selecting portfolios based on their overall risk-reward characteristics.  In a nutshell investors should select portfolios not individual securities.

Portfolio Selection

An investor’s choice of portfolio should be made based on the level of risk/volatility that the investor is willing to accept.  Remember that equities tend to be more volatile than either bonds or money market investment.  So the higher level of risk and volatility that you are willing to accept – the higher the level of equities that your portfolio will hold.

Diversification of your portfolio should not only consider asset class, but also other items, like market capitalization, consistent revenue, solid cash flow, consistent book value, solid dividend or distribution history, geographic regions, economic sectors, management style and investment style.  The goal is to increase your returns while at the same time minimizing or even reducing volatility relative to the underlying benchmarks.

What next? Stick to the plan!

Once you’ve made your asset allocation decisions and have selected investments that fit your plan, the majority of the hard work is done.  Instead of worrying when a particular asset class flounders, you can rest at night knowing that this volatility has already been accounted for in your investment plan.

By re-balancing the portfolio on a regular basis, asset allocation ensures that a hot investment does not take you beyond your tolerance for volatility.

How many people do you know who panic and sell their investments after they drop in value, only to buy the latest hot performer? They are buying high, and selling low – the exact opposite of what you want to do.

Asset allocation preaches time, patience, ease of management and long-term results; it is a balanced and rational approach designed to bring some order to an unpredictable economic environment.  Once implemented, the primary virtues required of the investor are the patience and discipline necessary to stick to a plan.


For more information on our Investment Planning Strategy contact our office.

0 comments on “Roots”

Roots

Knowing where you came from … where your roots were planted … where they were originally allowed to grow … allows you to go farther than those without an understanding of their roots.

Your language, traditions and core beliefs originated from those roots.  While those roots may not be perfect, from there you grow your own roots.  Be proud of those roots … they are yours.

Keep your own roots firmly and deeply planted, even while others try to dig them up and pull them out.  Those that attempt to do so, only do so out of their own weakness, their own evil, their own rotten roots.

Be proud of the knowledge that you possess as a result of those roots, whether that knowledge is good or bad.  Learn from that knowledge and apply that knowledge to the growing of your own roots.  The roots that your family will grow from.

Be kind to those roots, protect them and defend them.  It is from those roots that a successful life’s journey is dependent upon.

Enjoy the Journey!



0 comments on “The Sacrificial Marriage”

The Sacrificial Marriage

Have you ever heard the saying that ‘in order to have a successful marriage you must make sacrifices’?  How about ‘In order to appease the other partner you must make sacrifices’.  Or ‘to make your partner happy sometimes you must sacrifice what makes you happy in order for the other person to be happy’.

This kind of sounds like relationship requirements of the dark ages.  Back when the man controlled the relationship and the woman was there to appease the man.  A relationship that really wasn’t a relationship – it could be considered more of an ownership.  ‘You will honor and obey your man until death do you part’, pretty heavy commitment!

Is that really what it takes to have a successful relationship?

I had the great honor of being the Master of Ceremonies (MC) for my sister’s 25th Wedding Anniversary.  My sister and her husband are a great couple.  They haven’t always had it easy, but they have worked hard to become very successful.  When I say very successful I don’t mean they have become financially wealthy.  They have become wealthy in the true sense. They have a solid relationship, great career and business, strong spirituality and  they have three wonderful children.  They lead a very balanced life and it comes through in their relationship.

Following the traditional speeches, toasts and kind words it was time for me to close the ‘ceremonies’ so we could get to the dancing and celebrating part of the evening.

In my closing remarks I couldn’t resist but ask the 200 plus attendees to answer this question by a show of hands.  The question – ‘In order to have a successful marriage do you need to make sacrifices?’  Roughly 75% to 80% of the people put up their hands in agreement.  Yes you MUST make sacrifices.

I found this very interesting.  Especially after listening to the speeches and the accolades that everyone made about the couple that we were there to celebrate with.  None of the speeches talked about the sacrifices that they had to make in order to have a successful marriage.

Everyone spoke about the value of the friendship the couple possessed.  How they worked together to raise such a lovely family.  How proud their parents would be of them for what they have accomplished.  How they have accomplished so much in the past 25 years together.  And yet after all these comments the attendees felt very strongly that you have to make sacrifices in order to have a strong relationship.

Earlier that day I saw a poster that was completed by the Catechism class in the Church that we celebrated a renewal of their marriage vows.  A Catechism class is made up of young children. Across the top of of the poster it said ‘What is Love?’.  Then it had a few points below that defined Love in the minds of those children.  Some of the points were – Caring, Sharing, Helping, Fondness, Adoring and Respect.

Interesting that the word sacrifice was not on their list of how to define love.  Is it not love that is needed to have a strong relationship?  And if it is love, and if sacrifice doesn’t define love, then why do we feel that we must sacrifice to have a strong relationship.  Marriage is a Sacrament – sacrifice is not a Sacrament.

There will always be give and take – give and take is required to reach a common goal.  Give more and take less.  A strong relationship is 100/100.  Divorce is 50/50.

The common goal should be a strong loving relationship.  Not a relationship where you must sacrifice your core beliefs just to make the other person happy.  Nor should you demand that your partner make sacrifices so that you can gain what you want out of the relationship, in order to fulfill your selfish desires.

A relationship that is built on how the Catechism class defines love will always be stronger than the relationship that is built on sacrifices.


Dare you to Follow Me!

0 comments on “The Esteem That You Are”

The Esteem That You Are

 

“Growing your self esteem is the foundation of growing your relationships with all that you want in your life. Not because someone is watching … because you are watching.”


Self-Esteem is the reputation that you have with yourself.

Other-Esteem is the reputation that you try to gain from other sources than yourself.

Growing your self esteem grows the reputation that you have with yourself.  The reputation that you see and most others do not.  Depending on other esteem to grow your self esteem is usually a short term resolution to a long term necessity.  Self esteem is a long-term necessity.  Without self esteem, it is nearly impossible to have Faith.  In order to have Faith you need to stand for something, to have boundaries.

The stronger your self esteem, the stronger and more dependable your personal boundaries will be.  Having strong boundaries does not mean that you are arrogant.

‘Self’ is a person’s essential being that distinguishes you from others.

‘Esteem’ is respect and admiration, typically for a person.  Self esteem then, is the respect and admiration that you have for yourself

‘Arrogant’ is defined as having or revealing an exaggerated sense of one’s own importance or abilities.

Possessing a low self esteem would then mean that you have a low admiration of yourself.  A low belief in your essential being.  The being that you are.

Is the being that you are a butterfly or a mosquito?

A butterfly is graceful, beautiful and colorful.  Butterflies are difficult to catch.  If you do catch one, they are soft and confident when touched.  They spread life to plants.  They are an expression of love to humans.  They share hope.  They are respected and admired.

Mosquitoes on the other hand are arrogant.  They attack others.  They suck from others.  They spread disease.  They lack grace and they replace confidence with aggressiveness.  They possess few qualities that humans want.  And they are easily swatted and killed.

Would you rather be surrounded by butterflies or mosquitoes?

By Dwayne Fedoriuk

“Float like a butterfly and sting like a bee!” – The Greatest of All Time…Muhammad Ali



0 comments on “Financial Planning”

Financial Planning

Working with a Certified Financial Planner (CFP) will help you develop an effective financial plan.

Personal financial planning focuses on you as an individual – bringing together all the financial and psychological factors that have an impact on your life.

A well-designed financial plan will help you reach your personal financial goals and objectives, and give you a greater sense of security.

Many people call themselves financial planners, but the true professional financial planning practitioner uses the Total Financial Planning Process, which is made up of six distinct steps.

  1. Helps you clarify your present situation by collecting and assessing all relevant financial data – assets and liabilities, tax returns, records of securities transactions, insurance policies, wills and pension plans.
  2. Helps you to identify financial and personal goals and objectives, and also to clarify your financial and personal values and attitudes.
  3. Helps you to identify financial problems that can create barriers to your financial independence.
  4. Provides you with written recommendations and alternative solutions. These should be structured to meet your needs without undue emphasis on purchasing specific products.
  5. Assists you to implement the right strategy to ensure that you reach your goals and objectives.
  6. Provides a review and revision of your plan to ensure that you achieve your goals.

How do you know if you need to work with a Certified Financial Planner?

People hire financial planners for many reasons. These questions may help you decide if you need professional financial advice.

  • Do you have the time to attend to your personal financial affairs?
  • Are you confused about conflicting financial advice from several sources?
  • Do you feel you are paying too much tax?
  • Are you confused about where to invest your money?
  • Do you feel that you can’t make ends meet?
  • Do you feel that you can’t save any money?
  • Has there been a recent change in your life that could affect your financial future, such as retirement, job loss, an inheritance, an addition to your family, or loss of your spouse?

For more information on our Financial Planning Strategy contact our office.

0 comments on “Asset Allocation is Key”

Asset Allocation is Key

What is the Modern Portfolio Theory?  Asset allocation is the process of determining how your investment portfolio should be invested among the different asset classes, based on your risk tolerance and your financial goals. It involves diversifying or spreading your investments across these asset classes in order to maximize potential returns while minimizing risk.  Simply put, it is the practice of keeping your eggs in different baskets.

Of course in financial matters we are not dealing with eggs.  Instead we are dealing with money.  And to be specific, with money we are dealing with investments in particular.  Investments come in three basic types or asset classes: Stocks, Bonds and Money Market.

There are also several Non-Core types of investments like Real Estate, Resources and other high quality private investments that exist outside of the typical public offerings.  Basically the principal of diversification says that you should have a little in each of these to diversify yourself against risk of the stock market and whatever else might happen in life.

If all your money is invested in one sector of the economy or one region of the world, your investment returns are completely tied to its performance.  By spreading your money around in investments of various kinds (for example – lower risk and high risk; short term and longer term; blue chip and smaller companies), you reduce some of your risk because gains in one area can offset losses in another.  Over the long term, markets over-all have increased in value.  This is the principle behind asset allocation.

The First Step to Asset Allocation – A Plan

Since asset allocation has such a tremendous impact on investment returns, it underlines the fact that developing an investment plan – one that is diversified, and compliments both your investment goals and personal comfort with volatility – is the vital first step in your personal investment strategy.

Once you know what you want to achieve and when, you can decide how to achieve it by selecting the investments that work for you.  Asset allocation helps you create a personalized investment portfolio that manages risk without unduly diminishing returns.  Asset allocation provides the potential for maximum returns with the level of risk you’re willing to accept.

The Efficient Frontier – The Strategic Approach to Asset Allocation

Modern portfolio theory was introduced by Dr. Harry Markowitz with his paper titled Portfolio Selection.  This paper appeared in the 1952 Journal of Finance.  Thirty-eight years later he shared the Nobel Prize in economics with Merton Miller and William Sharpe for what has become a broad theory for portfolio selection.

Prior to Markowitz’s work, investors focused on assessing the risks and rewards of individual securities in constructing their portfolios.  Standard investment advice was to identify those securities that offered the best opportunities for gain with the least risk and then construct a portfolio from these.  Following this advice, an investor might conclude that railroad stocks all offered good risk-reward characteristics and compile a portfolio entirely from these.  Intuitively, this would be foolish.

Markowitz formalized this intuition.  Detailing the mathematics of diversification he proposed that investors focus on selecting portfolios based on their overall risk-reward characteristics.  In a nutshell investors should select portfolios not individual securities.

Portfolio Selection

An investor’s choice of portfolio should be made based on the level of risk/volatility that the investor is willing to accept.  Remember that equities tend to be more volatile than either bonds or money market investment.  So the higher level of risk and volatility that you are willing to accept – the higher the level of equities that your portfolio will hold.

Diversification of your portfolio should not only consider asset class, but also other items, like market capitalization, consistent revenue, solid cash flow, consistent book value, solid dividend or distribution history, geographic regions, economic sectors, management style and investment style.  The goal is to increase your returns while at the same time minimizing or even reducing volatility relative to the underlying benchmarks.

What next? Stick to the plan!

Once you’ve made your asset allocation decisions and have selected investments that fit your plan, the majority of the hard work is done.  Instead of worrying when a particular asset class flounders, you can rest at night knowing that this volatility has already been accounted for in your investment plan.

By re-balancing the portfolio on a regular basis, asset allocation ensures that a hot investment does not take you beyond your tolerance for volatility.

How many people do you know who panic and sell their investments after they drop in value, only to buy the latest hot performer? They are buying high, and selling low – the exact opposite of what you want to do.

Asset allocation preaches time, patience, ease of management and long-term results; it is a balanced and rational approach designed to bring some order to an unpredictable economic environment.  Once implemented, the primary virtues required of the investor are the patience and discipline necessary to stick to a plan.


For more information on our Investment Planning Strategy contact our office.

0 comments on “Realigning Our Worth”

Realigning Our Worth

The Facts

Fact. 1

Society’s value system is misaligned

Our society has a ridiculously huge focus on valuing a person’s net worth on how much stuff you own, or at least appear to own.  Commercialism is rampant.  Following the lifestyles of some rich, over indulged reality person for some reason has become reality – when in reality it isn’t.  People are led to believe that the person with the most toys wins.  And all you have to do is make more money so you can buy more things and all troubles will be cured.  The fact is that money is important – but it must be aligned with your well-being and the experiences that are of value to you and your family.


Fact. 2

Our well-being is continually challenged by the demands of society’s expectations.

The ‘Hamster Wheel’ lifestyle that people are living is putting a strain on our physical and spiritual beings…we are allowing this ‘Keep up with the Jones’ lifestyle to control our real meaning of life. Core values have become misaligned as a result of the pursuit for wealth.  A wealth that is misaligned, out of balance and has resulted in an implosion within individuals and their families.


Fact. 3

Our ability to grow and share our knowledge in meaningful ways is being taken away.

Because of the demands of day to day life we spend more time preparing for work, commuting to work and at work than the time we invest in experiences and the sharing of those experiences with those that are important to us.


Summary

Sageview Strategies is changing the way that your net worth is determined, invested and grown.  By focusing on the balance of three key areas in a triad, the results become more meaningful wealth.  It’s a wealth that is transferable from one generation to the next.  A wealth that does not deteriorate.  A wealth that is controlled by the owner – the owner is you.

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0 comments on “Vicissitude”

Vicissitude

Vicissitude – A change or variation occurring in the course of something

Why is wealth defined by how much you are financially worth?  How much money do you have in the bank?  (or under your mattress!)  How much is your stock portfolio was worth?  How big is your house?  And how expensive is your fancy suit?

Sageview Strategies Inc. is rewriting the book on how to define your wealth.  We believe that financial independence is defined by each individual person – that would be you – not some big bank or investment firm.

It’s the value that you place on your most meaningful assets that creates a wealth that grows exponentially.  A wealth that is truly balanced and meaningful.

Your belief’s, your values and your self-worth is the key to your financial independence.


Why does Sageview Strategies Inc. do what we do?

We believe that your wealth is a combination of your Personal Wisdom, Well-Being and Financial Assets.

Coaching individuals to invest in these assets today.  Growing their value into tomorrow. Then bringing them to the world in the future is our passion.

That’s how we are redefining wealth.

That’s Vicissitude!