It is crucial to understand how much risk you are taking in your investment portfolio. Losses from a drop in the stock market are much more likely to be a threat to your wealth than an insolvent brokerage firm. As a result, our team takes every step to help you understand your total investment risk and ensure it’s in alignment with your financial plan.
A common cause of sudden, undue loss from market fluctuation is holding a concentrated position in just a single stock or industry. This doesn’t just apply to holding a company’s stock directly. Even with multiple mutual funds or ETFs (Exchange Traded Funds), investors may be surprised to find that their portfolio contains too much in one stock or industry, such as technology or financials.
Over time, an account might also drift away from your risk tolerance. During a stock market rally, stocks increase in value and become a larger percentage of an account. This leads to sharper swings when the market corrects, catching an investor by surprise.
To address these concerns, our team models risk in multiple accounts and financial institutions through Riskalyze. A software program designed to model investment risk, Riskalyze estimates the greatest loss you could experience over six months, 95% of the time. While risk modeling is not a perfect science we believe this can help you to make informed decisions when it comes to asset allocation.
If you haven’t already, you can take a Riskalyze sample quiz here.
We also examine your investment portfolio in the context of your entire financial plan in an attempt to avoid risking more than necessary. We help you decide on a roadmap for reducing investment risk, such as rebalancing, protective options contracts, exchange funds, and more.
Another key area where we are all vulnerable is identity theft. Today’s cyber criminals have become increasingly sophisticated in personalizing attacks for each victim. Using social media, your email history, and other sources, they can craft attacks using the names of your employer, place of worship, and family members.
At BWM Financial, we are aware of this risk and take precautions to protect you. We endeavor to build processes based on the latest research to stay ahead of hackers and keep you safe. A boutique team that knows you personally, like ours, provides additional protection against scammers.
Guarding against identity theft also includes keeping your personal information out of the hands of scammers. Here are a few “common sense” tips to keep your information safe:
- Freeze your credit at all major reporting agencies (Experian, Equifax, Innovis, and TransUnion) to prevent new accounts from being opened in your name
- Don’t give personal information to unsolicited callers
- Don’t reuse the same password at multiple websites; consider a password management software to keep your login information secure
- Don’t click on links or attachments from suspicious senders, or send personal information over email
- Use multi–factor authentication (a separate code by email or text message) whenever possible, particularly for logins to financial institutions
There are multiple precautions that affluent families like yours should consider to protect your wealth. If you are concerned about the safety of your investments, please contact our office today. We will be happy to discuss how we can help protect your funds and provide you and your family peace of mind.