How a good portfolio is like thanksgiving Dinner

Hello ladies and gents, yes, I’m going to talk about Thanksgiving!

Mmmmm…. Thanksgiving. What’s not to like?

Turkey, mashed potatoes, pumpkin pie, and watching my beloved Detroit Lions…. Good portfolios are like a good Thanksgiving dinner – they have a little bit of everything! Even the weird Jell-O mold that Aunt Petunia brings with the walnuts and celery in it.

As an LGBT financial advisor, my clients usually ask me what kinds of investments they should have in their portfolio. Diversification can help your portfolio weather the good and the bad markets. It can help you take advantage of the upside and help temper the downside. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. No one asset class performs well in all market conditions. Some years bonds will do better, other years, blue chip stocks will do better. Sometimes, small cap companies are doing well, other times, well, it seems like everything is not performing well at all.

What to do:

Have a mixture of investments in your portfolio.

Some asset classes include:

Cash and cash instruments: These include CD’s, money markets and savings accounts

Fixed income investments: These would be bond investments. Bonds are debt instruments that pay a fixed interest rate. You can buy individual bonds with staggering maturity dates and investment grades to diversify the bond portion of your portfolio.

Growth and Income investments: These are usually large cap “blue chip” stocks . These investments usually look for modest capital appreciation and dividends. They are usually companies that have been around for many years and have a history of paying dividends. Many times, they may have years and years of dividend payment increases.

Growth investments: Small and midcap stocks. These may pay dividends, but are usually less than growth and income. They are looking more for capital appreciation of the stock and not as much of a focus on dividends.

Think of this like Thanksgiving dinner – you want your plate to have a little bit of everything!

How about balancing? Never put all your eggs in one basket. A mixture of all of the asset classes may be a better way to go.

Do you have a good mix in your portfolio?

The above is for information only. I suggest you speak to an ADPA (Accredited Domestic Partner Advisor) about your particular situation

Sharon L. Herman AAMS, ADPA is the CEO of Silver Key Wealth Management, and affiliated with LPL Financial.

The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Silver Key Wealth Management. Silver Key Wealth Management is a separate entity from LPL financial.

Ms. Herman may only discuss and/or conduct transact securities business with residents of FL, MI, GA, NJ, VA, TX.

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