fbpx

Planning For Your Investments
Part 1 of 3-Part Series

In our last series, we explored the important of retirement planning from as early as possible in order to secure your future. We talked a lot about smart investing to make your retirement years the best yet, climbing mountains or playing with your grandchildren. However, that isn’t possible without the investing that meets your goals, and there is a lot that happens behind the scenes to make that materialize. Most investment managers and companies follow a similar protocol, but here at Kismet we do things a bit differently.

 

The Kismet Wealth Strategy process focuses on creating the most efficient, risk adjusted portfolios tailored to our client’s investment experience, attitudes, objectives, time horizons and risk tolerance. This is much like other investment companies, but our holistic assessment goes beyond traditional investment vehicles like stocks, bonds and cash to include alternative asset classes like Real Estate, Private Equity, Gold, and other assets. Your life isn’t segmented into different sections, and all parts of our lives affect the rest. Much in the same way, this is how we look at your wealth management. All parts of your financial life affect each other and this is why everything is taken into account when planning your present and future.

 

Investor Risk Profile

To start planning your investments, the first and most basic step would be to take a detailed account of your assets and liabilities. This would include the holdings and structure of any such holdings in your current portfolio if you have one.

 

The next step is an Investor Risk Profile Tolerance Report would be created for you individually. It’s without a doubt, one of the most important steps and tools in building your portfolio because it accurately evaluates your willingness to take risk along with your ability to do so. This report is vital in determining how your assets will be best allocated in your investment portfolio.

 

Let’s break that down even further. Your willingness to take on risk – which for the purposes of this series, refers to your portfolio risk – determines whether you are risk averse or risk tolerant. If you are risk averse, it means you aren’t as willing to see your portfolio take losses or go down in value at any point. It also means that you’d rather be safe and see smaller gains or profit, so there is little risk of losing any of your investment assets. If you are risk tolerant, then the most important thing to you is the highest possible returns on your investment, more money in the bank. Of course, that means higher risk in your portfolio to achieve that goal, and the up and down swings in the short term or even longer term is acceptable.

 

Part 2 continued next week.