Financial Advisor News

Piedmont, CA

Financial Advisor News

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Piedmont, CA

by: ALISON VAN DYKE

FIRST AND MAIN FINANCIAL

(510) 601-1935

Oakland, CA | East Bay; Healthy Portfolio Allocation During Retirement

Hi, I’m Erik Wolfers, founder and managing member of First & Main Financial. We’ve been helping our clients successfully get through retirement since 2001. Today I want to talk just a little bit about asset allocation and expectations.

Asset allocation is how your portfolio is invested—you could be 100% in the stock market, or you could have some amount of bonds or cash. If you consider real estate another asset, you might have some of that. There are things like alternative Investments that are designed to move in different directions than the stock market, or not be connected to movements of the stock market. Your asset allocation also could be one stock—you might just own all Apple stock or 10 different stocks. But there is an expected return that comes from your asset allocation—that’s the primary determinant of how much you should expect to make.

Since the beginning of the stock market, creeping up on a hundred years now, large US stocks have made something close to between 9% and 10%, depending on when you look and when you measure. There are other baskets of stocks that have a history of making more. The stock market doesn’t always go up—if it went up everyday just by a little bit people would be really happy. But generally there’s volatility because prices for stocks are based in part on expectations about profitability and the economy and stability in the economy.

We often have conversations with clients about what to expect, and we build diversified portfolios for them. Someone that doesn’t need the money for a long time, generally is in a portfolio that is in 100% of the stock market—but it’s also spread around the globe in different concentrated baskets of stocks that are likely to outperform over time relative to the index that they would be measured against.

If you have 40% bonds in your portfolio over a long period of time, you should expect to make less money than if you’re a 100% in the stock market. But if you need cash on a regular basis, then those bonds give you a relatively safe place to get cash, so you can live in retirement without worrying about the long-term health of your portfolio.

Within the stock market, as I mentioned, we have baskets of stocks that are not large cap stocks—the S&P 500 being the most popular index for measuring performance of large-cap stocks—and sometimes a different basket of stocks gets behind large cap stocks. Large cap stocks are the most consistent performers but they’re not the best performers historically. If everything in our client’s portfolios always went in the same direction at the same time then it wouldn’t be diversified.

There’s no perfect answer necessarily about whether you want all of your assets to keep moving in the same direction at the same time. It can certainly be frightening in market downturns.

That’s just a little bit of information on diversification, various baskets of stocks and relative performance. We’ve been doing this for a long time so we’re happy to have conversations about it at any time. If you are looking for some financial guidance; whether for a one time financial plan or continuing advice on your investments, we invite you to meet with a First & Main Financial planner for a free consultation. We would be more than happy to sit down with you, assess your situation and review our services to help navigate your financial future.

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“Best Financial Advisor in Piedmont, CA”

Top Rated Local Financial Advisor / Planner

East Bay Area: Piedmont, Oakland, Berkeley, Alameda, Orinda, CA

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Recent

“Best Financial Advisor in Piedmont, CA”

Top Rated Local Financial Advisor / Planner

East Bay Area: Piedmont, Oakland, Berkeley, Alameda, Orinda, CA

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.

235 Wildwood Avenue,
Piedmont, CA 94610, USA

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BIO: At First & Main Financial, Alison Van Dyke helps clients with their financial lives. She has worked in Corporate Finance for Bank of America and Chase Manhattan Bank. Alison is pursuing the CFP® certification; she received her MBA at Georgetown and her B.A. in Political Science from UCLA.