Tag Archives: investment risk tolerance

FIVE LESSONS LEARNED THE PAST 12 MONTHS

Posted September 27, 2012 by admin. tags:Tags: , , ,
The Canyon


Written by Dave Young, President of Paragon Wealth Management

“Buy and Hold” strategy doesn’t work.
The investment strategy that Wall Street and mutual fund companies constantly promote called “buy and hold,” has been a complete failure over the past 12 years. It has generated negative returns when adjusted for inflation.

Market forecasts by “experts” provide no benefit. 
Most forecasters completely missed this decline. The majority also missed the recent rebound.

Set your risk tolerance level.
Setting your risk tolerance properly before investing is critical to success. You must be comfortable with the amount of volatility in your portfolio or you are likely panic and sell at the wrong time. Once again, hoards of investors bailed out at the market bottom and then missed the entire rally.

Expect the Unexpected.
When building your retirement plan, hope for the best but plan for the worst.

Follow a disciplined, proactive investment strategy.
Remove emotion from your investment process. In the investment world, decisions based on emotion are usually wrong.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions.  Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy.  All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice.  This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.  Past performance is not a guarantee of future results.

Are you ready for your retirement?

Posted February 25, 2011 by admin. tags:Tags: , , ,
Beautiful Beach and Sunset


photo by David Saunders Photography

Written by Dave Young, President of Paragon Wealth Management

At the start of a new year, we begin to think about our goals. We might think about getting back in shape, spending more time with our families, eating better, reading more, etc.

Another goal you might have is getting your finances in order to help you prepare for your retirement. Do you know if you are on track to retire at the age you’d like? How is your portfolio positioned? Is your portfolio set properly for your investment risk tolerance? If you have retired, are you on the right track? We’d like to help you answer these questions and more.

We are introducing a new service that we are only offering to our blog readers for the next month. It is a complimentary retirement analysis. We will focus on your investments, give you a second opinion on how they are positioned, make sure your plan is aligned with your goals, and answer any questions you may have.

Call 800-748-4451 to schedule your appointment.

This is one of the most important goals you should evaluate. If you don’t know where you are going, it is difficult to get there.

We will help you answer these questions:

– How much money do you need to save each year to meet your retirement goals?
– What rate of return does your portfolio need to generate?
– What is the probability you will reach your objective – at a different rate of return?
– Is your portfolio properly positioned for where we are in the market cycle?
– Are you taking too little or too much risk?

Paragon began in 1986. Since then we have talked to thousands of investors about their porfolios. These are some of the investment mistakes we’ve seen repeatedly.

Mistakes Investors Make

RISK TOLERANCE
Investors don’t often know how much risk they need to take in order to reach their goals. In addition, they haven’t defined how much market volatility they can comfortably live with. Most of the time they don’t know how much risk they are actually taking because they haven’t defined their risk tolerance. As a result, next time the market goes down they will likely endure sleepness nights as they hope the market recovers. Their odds for success are low.

DIVERSIFICATION 
Investors own many mutual funds and think they are diversified. We regularly see accounts that are holding 40+ funds. What they often don’t realize is that many of their funds hold the same stocks. In reality, they are not diversified at all. They usually take more risk than they realize.

BONDS 
Investors hold bonds for safety and stability. Bonds provided safety over the past 30 years because interest rates declined from 18 percent down to 2.5 percent. Most bonds do not provide safety when interest rates move up. To the contrary, bondholders may see significant losses going forward as rates increase from the all time lows.

HIGH EXPENSES
Many portfolios are filled with expensive mutual funds. Investors are paying management fees, transaction costs and 12b1 fees. They can often achieve the same market exposure through ETF’s at a fraction of the cost.

KNOW WHEN TO SELL 
Buying a stock or fund is the easy part. Knowing when to sell is the hard part. Investors should never own a position they wouldn’t be willing to buy today. We see portfolios full of investments that should have been sold long ago.

Are you ready for your retirement? Is your retirement going well if you’ve retired already? Call us at 800-748-4451 from now until April 1 to schedule your complimentary retirement analysis.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Any information presented is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. All opinions and estimates constitute the judgement as of the dates indicated and are subject to change without notice. Do not rely upon this information to predict future investment performance or market conditions. This information is not a substitute for consultation with a competent financial, legal, or tax adviser and should only be used in conjunction with his/her advice.

 

Paragon’s New Videos

Posted February 25, 2010 by admin. tags:Tags: , , ,

We are excited to introduce
our new website and videos that will be
online in the next week. Over the past few months, we redesigned our
website and created several educational videos on topics such as
proactive vs. passive investing, big vs. small investment firms,
setting your risk tolerance properly, how to select a financial advisor,
and several others. We also created two new videos about Paragon Wealth
Management.

Our new website will be very educational for investors. In addition to
the videos, there will also be articles and other tools for you to use.
We hope you
find it helpful. We will let you know when the new site is
available.

Below is a brief, 40 second video about Paragon.

Paragon
Wealth Management
is a provider of managed portfolios for
individuals and institutions.  Although the information included in this
report has been obtained from sources Paragon believes to be reliable,
we do not guarantee its accuracy.  All opinions and estimates included
in this report constitute the judgment as of the dates indicated and are
subject to change without notice.  This report is for informational
purposes only and is not intended as an offer or solicitation with
respect to the purchase or sale of any security.  Past performance is
not a guarantee of future results.

Do you know your Investment Risk Tolerance?

Posted January 28, 2010 by admin. tags:Tags: , ,
Risk

Playing the game of Risk

photo by Fayj

Written by Dave Young, President of Paragon

A 20-year study by Dalbar concluded that between 1987 and 2007 the average investor only earned 4.5%. During that same period of time the S&P 500 returned 11.8%. We all know it is tough to make money during bad markets. But why, even during the best of times, do the majority of investors suffer from poor performance?

One of the reasons is that they don’t stick with their investment strategy during difficult markets. When markets go up, investors are attracted to the market and stay invested easily. When the market starts to go down, most investors still stay invested. It’s usually after the market has fallen significantly that panic sets in and investors bail out. They usually bail out close to the bottom right before the market starts to rebound. This pattern repeats itself over and over with the result being that most investors are constantly buying high and selling low.

If your investment risk tolerance is set too low, you won’t generate the returns you should. If it is set too high, when market conditions become difficult, you will likely sell your investments and miss out on superior long-term returns. Setting your risk tolerance and then aligning your portfolio with it allows you to reduce your portfolio volatility to a level that you can live with.

Before you invest, you need to ask yourself how you will react if your portfolio drops five percent. What about 10 percent? What about 20 or 30 percent? At what point would you want to sell out of your investments and run for the hills?

Once you answer that question, then your portfolio should be invested so you never hit the point that will force you to sell at the market lows. That will allow you to follow your investment strategy over the long-term and be invested when the best opportunities present themselves. It will also allow you to generate the best possible returns over the long-term.

Over my 23 years of wealth management experience, I believe that determining your risk tolerance is one of the most important steps an investor should take.

If you are married, both you and your companion should take the questionnaire and compare the results. Since identifying your tolerance can be difficult, Paragon Wealth Management created a short risk tolerance questionnaire to simplify the process.

Click on the link below to complete a short questionnaire to help you identify your investment risk tolerance.

Paragon Wealth Management is a provider of managed portfolios for individuals and institutions.  Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy.  All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice.  This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.  Past performance is not a guarantee of future results.

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