Many of our clients had a financial advisor before coming to Wealthcare Financial Group, Inc. But they were intrigued at how confident we were about accomplishing three key things:
1) reducing portfolio risk
2) reducing portfolio fees & expenses
3) increasing risk-adjusted returns. All we ask … all we ever ask … is for a fair opportunity to explain how we accomplish this for our client
With that said, we view cryptos as an “alternative investment.” Meaning, it is not prudent to hold a significant percentage of one’s assets in any alternative investment, whether it is a closed-end REIT (Real Estate Investment Trust), gold, oil, a hedge fund, peer-to-peer lending, etc. Alternative investments may offset the performance of the overall portfolio because they tend to not be positively correlated to the stock market. However, we cannot overstate the importance of being diversified.
Therefore, a “faith-based” portfolio is one that intentionally avoids buying stocks that represent industries such as alcoholic beverages, casinos and gaming, tobacco products, etc. The pro to faith-based investing is that you can own shares of companies that do not represent industries that are inconsistent with your faith. The con of faith-based investing is that by not owning certain securities, you may limit your portfolio to investments that may not perform as well. With faith-based investing, you can still build a portfolio that is diversified. Just know that it might not be as diversified as it could be. Since diversification is correlated with investment performance, then you will have to decide how important diversification is to you.
Downturns in the market, whether expected or not, can sometimes present an attractive buying opportunity. It is important remain somewhat methodical, analytical and vigilant during a negative period in the market or economy. Being emotional is not helpful! Hopefully, you/your financial advisor was thinking about how your portfolio might perform during a down market when designing and building your portfolio.