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5 Important Aspects of Asset Allocation

by AOG Wealth Management

The stock market is probably the first thing that springs to a beginner’s mind when thoughts turn to “investing”. While investing in stocks can possibly provide positive returns, this can be just one of many investment vehicles within a comprehensive investment strategy. That’s because there are other asset classes to consider and choosing different investment vehicles helps to reduce investment risks.

Asset Allocation

Asset allocation is an investment strategy that allows you to allocate your investment funds across several asset classes, such as stocks, bonds, real estate, and money market securities. Its goal is to minimize risk while maximizing return across your investment portfolio. AOG Wealth Management, an experienced company providing asset management in Washington, DC and Northern Virginia, shares five things you need to know:

1. Choosing Assets With the Highest Potential Returns isn’t Always the Answer – Certain investment vehicles, like the stock market, have a tendency to rise or fall during specific economic events. Since asset classes do not typically fluctuate together in response to market forces, combining them into a diverse portfolio can potentially help boost your investments.

2. Financial Planning Software Can Only Do So Much – While standard worksheets or software can be beneficial, they might not be reliable in some cases. Some of these tools don’t consider other important information. Other times, they are based on a set of questions that don’t connect to your financial goals. Consult your McLean asset management specialist to help you plan your assets the right way.

3. Identifying Goals is an Important Part of the Process – Do you want to own a vacation home in 10 years? Or perhaps you want to simply save up for your child’s college education? When planning the right investment mix, it’s crucial that you include all your goals in your asset allocation plan.

4. Time is Your Best Friend – Having time will allow you to maximize the time value of your money. So start early!

5. Proper Implementation is the Key – After creating your own investment mix, you need to implement it properly. First, you need to determine how your current portfolio breaks down. As the premier company for investment management in Washington, DC and Northern Virginia, we can help categorize the type of stocks and other asset classes you own, and guide you in implementing your portfolio.

For more asset allocation facts and tips, contact our financial experts today. Simply give us a call at (866) 993-0203 or complete our form, and we’ll schedule a free financial review with you.

The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your accountant, tax, or legal advisor with regard to your individual situation.

Category: Asset Management