Investment Advisory Services

An investment portfolio is a collection of financial assets that an individual or entity buys, holds, and sells to achieve their financial goals, to manage risk, and potentially grow their wealth.

These assets can include:

• Stocks (ownership in companies).
• Bonds (debt securities issued by governments or corporations).
• Mutual Funds & Exchange Traded Funds (pooled investment funds).
• Real Estate (physical properties or REITs (Real Estate Investment Trusts).
• Commodities (gold, oil, natural gas etc.).
• Cryptocurrencies (Bitcoin, Ethereum, Tron, Bnb, etc.).
• Alternative Investments (private equity, hedge funds, collectibles).

Typically, an investor will buy and hold different asset classes, because the performance of one asset class may go up or down over time. For example, when commodities are performing well, Mutual Funds may be performing badly. Hence, a well-diversified portfolio spreads an investor’s risk across different asset types to maximize returns while minimizing potential losses.

The right mix of investments for you depends on your financial goals, risk tolerance, and investment horizon (how long you plan to hold onto your investments).

Investment portfolio management is crucial for optimizing returns, managing risk, and aligning your assets with your financial goals. A well-structured portfolio helps investors grow wealth strategically while adapting to market conditions and life changes.

• Potential for Growth:Because some assets represent higher growth at higher risk, diversified portfolios can potentially achieve higher returns than holding a single asset.
• Risk Management Through Diversification:Spreading investments across different asset classes (stocks, bonds, real estate, commodities, etc.) reduces the impact of a single asset’s poor performance.
• Financial Goal Achievement:An investment portfolio helps investors achieve their long-term financial goals, such as retirement or purchasing a home whilst aligning with their risk tolerance.
• Market Adaptability: Regular portfolio reviews help adjust to economic shifts, interest rate changes, and personal milestones like marriage or career shifts.

A typical financial portfolio contains a collection of financial investments across a mix of different asset classes, like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange-traded funds (ETFs). It is also known as an investment portfolio.

Are there different kinds of Portfolios?

You will find that stocks, bonds, and cash comprise the core of most people’s portfolios. But this does not need to be the rule: a portfolio may contain a wide range of assets, including real estate, art, antiques, cars, and private investments.

A person’s tolerance for risk, investment objectives, and time horizon are all critical factors when assembling and adjusting an investment portfolio.

Who Manages Investment Portfolios?

You may choose to hold and manage your portfolio yourself. Doing so is called active portfolio management and generally requires a deep knowledge of markets and a regular time commitment.

Alternatively, you may allow a money manager, financial advisor, or another finance professional to manage your portfolio.

Portfolio Diversification.

One of the key concepts in portfolio management is diversification (which simply means not putting all your eggs in one basket).

Diversification reduces risk by allocating investments among various financial instruments, industries, and other categories. Diversification also aims to maximize returns by investing in different areas that would each react differently to the same event (such as a market crash). There are many ways to diversify.

What Is the 5% Rule of Investing?

The 5% rule aims to aid diversification in an investment portfolio. It states that an investor should not hold more than 5% of the total value of their portfolio in a single security.

How can I measure my portfolio’s performance?

Evaluating your portfolio’s performance involves comparing returns in your portfolio against benchmarks or indices that reflect your investment strategy. Regular assessments help determine whether adjustments are necessary to meet your objectives.

There isn’t one way to build a portfolio for every investor. The best way to build and balance your portfolio should account for your risk tolerance, financial plans, and evolving needs over time.

If you are starting to build a financial (investment) portfolio, you should begin by deciding whether to manage your portfolio yourself or allow a money manager, financial advisor, or another finance professional to manage it on your behalf.

Most people opt for getting a professional to manage their portfolios, largely because professional knowledge and active, hands-on management helps to grow and manage

a portfolio whilst minimizing risk.

Either way, if you are starting an investment portfolio, a good way to minimize risk is by creating a diversified and balanced portfolio with stocks, bonds, and cash that aligns with your short- and long-term goals.

From there, you can always broaden your portfolio to include other assets like real estate or high-risk investments for an increased likelihood of higher returns.

The following 6 steps are recommended in starting your portfolio.

• Establish the different types of portfolio investments available to you.
• Put your money into different funds (stocks, bonds, and cash).
• Diversify across the same asset classes.
• Diversify across different asset classes.
• Determine your asset split based on your age and risk profile.
• Continue to tweak your portfolio.

Balancing Risk and Growth

A good way to minimize risk is by creating a diversified and balanced portfolio with stocks, bonds, and cash that aligns with your short- and long-term goals. From there, you can broaden your portfolio to include other assets like real estate or high-risk investments for an increased likelihood of higher returns.

What Is the 5% Rule of Investing?

The 5% rule aims to aid diversification in an investment portfolio. It states that an investor should not hold more than 5% of the total value of their portfolio in a single security.

Regular portfolio reviews are essential to ensure alignment with your investment strategy. Rebalancing frequency depends on personal preferences and market conditions; however, annual reviews are commonly recommended.

How can I measure my portfolio’s performance?

Evaluating your portfolio’s performance involves comparing returns in your portfolio against benchmarks or indices that reflect your investment strategy. Regular assessments help determine whether adjustments are necessary to meet your objectives.

How often should I rebalance my portfolio?

Investors need to balance their portfolio with the following in mind: their financial situation, short- and long-term financial objectives, and tolerance for risk. Below, we explore how different life stages influence investment choices, discuss strategies for diversification, and discuss how to adapt your portfolio depending upon its performance and as your financial situation evolves.

In your 20s

If you’re ever going to invest aggressively, there’s no better time to do it. Given a longer investment horizon (30+ years), you’ll always have the time to recover from market downturns should they occur. Consider assigning a greater portion of your portfolio to stocks, especially growth stocks or exchange-traded funds linked to them, which historically offer higher returns (in exchange for greater risk). Also consider prioritizing contributions to your retirement accounts.

In your 30s and 40s

As your responsibilities increase in your 30s and 40s, balancing growth against risk becomes a key focus. As you continue investing in stocks, you may start incorporating bonds and fixed-income assets to reduce volatility. By diversifying across asset classes, like real estate or mutual funds, you will manage risk while still providing prospects for growth.

You should also try to build a liquid fund for emergencies while continuing with your automated investments for the long term and prioritizing contributions to your retirement accounts.

In your 50s and 60s

Your focus should turn to planning for income streams to support you once you retire. This may entail shifting your portfolio toward more conservative investments by increasing your allocation of bonds, dividend-paying stocks, and other stable income-generating assets. These could include annuities, government bonds, or dividend-paying investments.

As you reassess your risk tolerance and investment goals, you may move toward assets that provide more liquidity and lower volatility.

The suitable risk level depends on individual factors such as your age, financial goals, and comfort with market volatility. Younger investors might opt for higher risk for potential growth, while those nearing retirement may prefer conservative investments.

Balancing Risk and Growth

A good way to minimize risk is by creating a diversified and balanced portfolio with stocks, bonds, and cash that aligns with your short- and long-term goals. From there, you can broaden your portfolio to include other assets like real estate or high-risk investments for an increased likelihood of higher returns.

As you reassess your risk tolerance and investment goals in your 50s and 60s, your focus should turn to planning for income streams to support you once you retire. You may move toward assets that provide more liquidity and lower volatility.

When should I rebalance my portfolio?

Regular portfolio reviews are essential to ensure alignment with your investment strategy. Rebalancing frequency depends on personal preferences and market conditions; however, annual reviews are commonly recommended.

Investments may typically incur various fees, including management fees, transaction costs, and taxes. Understanding these expenses is vital, as they can impact overall returns.

While it’s most often better to leave the management of your investment portfolio to the professionals, there are ways to reduce or limit the fees that managing your portfolio attracts.

Here’s a detailed breakdown:

1. Advisory & Management Fees

• Financial Advisor Fees – Fees that are charged by financial advisors for managing your investments (these are typically 0.25% – 1.5% of assets under management).
• Robo-Advisor Fees – Automated investment platforms charge lower fees (usually 0.25% – 0.50%).
• Wealth Management Fees – Full-service firms charge fees for personalized financial planning and investment management. It is best to make sure you understand what these fees are before making a commitment.

2. Fund & Account Fees

• Mutual Fund Expense Ratios – The percentage deducted annually for fund management ranges from 0.1% of assets (low-cost index funds) to 2% or more of assets (actively managed funds).
• ETF Expense Ratios – These are typically lower than mutual funds, averaging 0.03% – 0.75%.
• Index Fund Fees – Low-cost funds tracking market indices charge minimal fees (~0.02% – 0.2%).
• 401(k) & IRA Fees – Retirement accounts may have administrative or management fees. These can be ascertained through your company or IRA.

3. Trading & Transaction Costs

• Commission Fees – Fees per trade for buying/selling stocks, options, or bonds. Many brokers offer $0 commissions for stocks and ETFs.
• Bid-Ask Spread – The difference between the buying and selling price of an asset, indirectly increasing transaction costs.
• Brokerage Account Fees – Some firms charge account maintenance or inactivity fees.

4. Performance-Based Fees

• Hedge Fund Performance Fees – Hedge funds often charge a “2 and 20” model (2% management fee + 20% of profits).
• Wrap Fees – A bundled fee covering investment management, advisory services, and trading (typically 1% – 3% of assets).
• Custodian Fees – Charged by firms that hold your investments in safekeeping.

5. Tax-Related Costs

• Capital Gains Taxes – Taxes on profits from selling investments. These vary according to holding period (short-term vs. long-term).
• Dividend Taxes – Taxes on dividend income (qualified dividends are taxed at lower rates).
• Foreign Transaction Fees – Additional costs for investing in international securities.

6. Miscellaneous Fees

• Account Transfer Fees – Fees for moving investments between brokers (typically $50 – $100).
• Wire Transfer Fees – Charged for moving money in and out of your account.
• Margin Interest – Interest paid when borrowing money to invest (margin trading).

How to Reduce Fees

• Choose low-cost index funds and ETFs over actively managed funds.
• Use discount brokers that offer commission-free trading.
• Minimize tax impact by holding investments long-term.
• Avoid excessive trading to reduce transaction costs.