The 4 Steps to Prepare Your Portfolio for an Election


September 22, 2020

The 4 Steps to Prepare Your Portfolio for an Election

September 22, 2020

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This week on the podcast we talked about how to prepare your investment portfolio for the 2020 Election Season! Here are the 4 Steps to Success that we outlined throughout the week.

Step 1: Use Diversification and Non-Correlating Assets

A diversified portfolio is the concept of investing in a wide variety of assets to reduce risk. It is almost impossible to find a perfect degree of non-correlating assets, but by choosing assets that fall on different sides of the -1.0 to +1.0 scale, you are ensuring the success of your entire portfolio!

Step 2: Re-evaluate your Put-Options and Stop Losses

A put-option is a contract giving the owner the right, but not the obligation, to sell a security at a predetermined price within a specific time frame and a stop loss: a standing order to sell a particular security when it drops in price by a certain percentage. Any market-timing decisions are notoriously unreliable, so both of these strategies can erode your long term returns and are risky for the overall health of your investment portfolio! Make sure if you plan on or are using either of these strategies that they are well-planned out.

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It’s important to know how to ensure that your portfolio does not face any excess volatility during an election.

Step 3: Use Principal-Protected Notes and Bonds

Principal-protected notes are fixed-income securities, like bonds, and guarantee you, at the very least, a return on your original investment. However, they are more complicated than bonds because of the numerous risks and fees involved, such as management and early redemption fees.

Step 4: Gold, Dividends, and Wealth Management Team⠀

Gold should be an important part of any diversified investment portfolio; its price increases in response to events that cause the value of paper investments to decline, such as stocks and bonds. Although gold can have short-term volatility, it has always maintained its long-term value. Dividends are a distribution of profits which a company gives to its current shareholders and because it is typically a cash payout to investors at least once a year, it is a very popular way to provide a steady stream of income from your investments.

Most financial advisors only give advice in one area, like financial planning, estate, or tax advice. However, Liberty Group does ALL three plus more. Our wealth management team will make sure that every aspect of your financial livelihood, including your legal needs, are taken care of.

Even though there are only 4 steps to ensure the success of your portfolio, there are so many moving parts that go into making a long term investment portfolio. Not to mention, every single investment portfolio is different and unique to the individual. Let our experts at Liberty Group be there for you to help guide you through the process to lifelong success! Contact us for a free consultation.

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