Portfolio Strategy

At Rethink Capital, we believe investors should strive to build a well-balanced investment portfolio.  This requires a solid understanding of risk.

All investments entail risk, including the risk you may lose some or even all of your money. Your return is meant to compensate you for this risk. Therefore, the higher the risk of an investment, the higher should be the expected return.

You can think of your Portfolio as being distributed across three levels in a pyramid shape:

1. The base includes low-risk investments such as government bonds, money market funds, CDs and cash.
2. The middle of the pyramid includes conservative to moderate investments such as real estate, high-yield bonds, large/small cap equities and mutual funds.
3. The summit would consist of options, futures, and microcap investments or penny stocks.

Use this idea to diversify your investments. Start building your portfolio at the base, establish a solid foundation and work up. Consider factors such as your time horizon (how long until you need this money), the amount of money you can afford to invest, and your personal risk profile.

If you have questions about building a well-balanced investment portfolio, you should speak with a financial advisor.

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