As the calendar closes in on the end of the year, many investors are wondering both, “What happened?” and “What should I do next?”
(PRWEB) -- For Rick Lear, vice president of Sloan Wealth Management, these sorts of questions indicate the need for more communication between a client and his or her investment advisor; in particular, a better understanding of how things have changed. Lear says the old investment model that recommended maintaining 60% stocks and 40% bonds is too simplistic and no longer viable.
Frank O. Sloan, firm founder and president, points out that investors must be more tactical in their individual strategies because today investing involves a global economy with advancing technology and instant communication. Investment strategies need to adjust to changing economic and geopolitical events. Today Sloan recomm less trading as an investment strategy and more analysis of investment opportunities that may be outside an investor’s typical comfort zone.
“The market is a global one, more today than ever before. Portfolios that have traditionally held the 60/40 balance and focused primarily on U.S.-based investments need to be analyzed and investors need to be educated about different opportunities and strategies that capitalize on the economic realities, rather than react to them,” Sloan says.
Lear says the technique used by their firm is called “Thematic Rebalancing.” This proactive strategy analyzes many investment themes in line with the state of the market worldwide before portfolios are tactically rebalanced. For example, in the early stages of an economic recovery, like now when the U.S. seems to be emerging from recession, it makes sense to overweight high yield bonds to capture as much growth and yield as possible. Another example is if there is a compelling reason to think the dollar will be unusually weak, a portfolio might be shifted toward more foreign securities.
Casey W. Conway, vice president portfolio manager, says that, despite recent U.S. market gains, investors remain very concerned with the troubled state of the financial industry. New clients coming to Sloan Wealth Management for help are far more interested in being aware of market conditions and strategies than before.
“People want direct access to the individuals managing their money. That gives them a better sense of control than when they are dealing with a 3rd party liaison or other type of relationship manager,” Conway says.
Sloan says his firm has always operated with an open door policy for clients.
“We have always found that better investment decisions are made when a client is involved or at least aware of our strategies. Our philosophy is to manage money like it is our own, while never forgetting that it isn’t. That keeps us focused on how important it is to our client and keeps the doors of communication open,” Sloan says.
For 2010, Sloan says his best advice to investors is to focus on the reasons why a portfolio is being shifted or why a particular investment is being made, rather than simply accepting trading changes or recommendations to move money just for the sake of moving it.
“It’s important that the communication is there so that you’re not asking, ‘What happened?’ but instead saying, ‘I’m glad we did what we did, and I feel good about why we did it,’” Sloan says.
Sloan Wealth Management is a Dallas based investment management firm that works with high net worth individuals and families, as well as trusts, corporations, and associations. The firm’s team has more than 90 years of combined experience in money management.
For more information, contact Frank Sloan or Rick Lear 214 720 7500.
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