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US News

Create Your Own Portfolio Benchmark

By | US News

An Excerpt from the Article:

Much of the heavy lifting of investing centers on choosing the right assets for your portfolio. How those investments perform can influence your short-term decision-making and long-term outcomes.

Choosing a benchmark to measure your portfolio’s performance against is standard practice for many investors. For example, the Standard and Poor’s 500 index is a commonly used benchmark. Some investors may measure their portfolios against a specific asset class or sector. Others may use a target-date fund based on their retirement age as a performance guideline.

A written plan keeps you grounded. Discipline and commitment are critical to investing. An investment policy statement (IPS) can lay the groundwork for developing a personal benchmark. This written plan for managing your portfolio is something every investor needs because it puts you and your financial advisor on the same page regarding your expectations and comfort level, says Ken Heise, a financial advisor with Heise Advisory Group in St. Louis.

The Mental Mistake Hurting Millennial Investors

By | US News

An Excerpt from the Article:

A decade after the economic collapse, a new generation of investors are still feeling its impact.

Despite having been mainly on the sidelines during the peak of the financial crisis, 82 percent of millennials say their investment decisions are influenced by it, according to a recent Legg Mason survey. An even larger share – 85 percent – say they invest conservatively, making millennials the most risk-averse generation of investors

Accepting that the market periodically swings widely could ease fears and curb emotional decision-making. As your mindset shifts, your risk tolerance may shift along with it. Ken Heise, a financial advisor with Heise Advisory Group in St. Louis, says a down market can benefit younger investors. When stock prices drop, that’s the time to buy, Heise says. Rather than fearing market cycles, millennials “should seize the opportunity and turn it into an advantage.

“Smooth out the roller-coaster ride. Learning to manage risk will help millennials brave the ups and downs of the market. A diversified portfolio, Heise says, can “smooth out the roller-coaster” ride, easing investor anxiety.