• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Nevada Business Magazine

The Decision Maker's Magazine

Subscribe Now!

  • Subscriptions
    • Print
    • Mobile App
    • Email
    • Nevada News & PR Wire
  • Features
    • New This Month
    • View Issues
    • Cover Stories
    • Feature Stories
    • Industry Focus
    • Building Nevada
    • Special Reports
    • Press Release Wire
    • Nevada Industries
  • Departments
    • A Matter of Opinion
    • Around the State
    • Business Indicators
    • Commentary
    • Commercial RE Report
    • Crossfire
    • Expert Advice
    • Face to Face
    • Free Market Watch
    • Inside Politics
    • Power of Attorney
    • Profit & Loss
    • Speaking for Nevada
    • Tech.knowledge.me
    • The Last Word
    • Vital Signs
  • Planning Calendar
  • Advertising
    • Advertising Info
    • Advertising Staff
    • Submission Requirements
    • Online Advertising
  • Events
    • NBM Events
  • About
    • About the Magazine
    • Contact the Staff
  • Connect
    • Business Directory
    • Press Release Wire
    • Business Calendar
    • Submit Listing
    • Post Press Release
    • Add Your Event
    • Sign Up
    • Log In
You are here: Home / Features / Feature Story / Investment Strategies: Designing the Perfect Portfolio

Investment Strategies: Designing the Perfect Portfolio

November 1, 2015 By Nevada Business Mag Leave a Comment

The trick for any investor is how to turn that overload of investing information into a long-term investment strategy.When it comes to investing, there is no shortage of strategies. Through a variety of resources from books to television to online, potential investors are inundated with information on the topic.

The trick for any investor is how to turn that overload of investing information into a long-term investment strategy that will allow them to achieve their financial goals. For most people, those goals include paying for their children’s education and their own retirement.

Before beginning investing, most executives and employees have to decide what they are planning for. While there are any number of investment approaches, advisors focused on several key strategies to improve long-term results.

“Usually, the questions I get are, will I have enough [money] to retire, or, how much money will I need to retire?” said Brian Loy, a financial advisor with Sage Financial Advisors Inc.

Loy added that one thing is sure, “you’ll need more money than you think you will.” He also attributed the increased cost of retirement to people living longer.

According to Loy, on average people are living 30 years after they retire. With $2 million saved and living off 4 percent annually. That amounts to an income of $80,000.

“At 65, most people will live for three more decades,” Loy explained. “That’s a long time. Maybe you need to work to 68 or 70 instead of 65.” Loy said part of any comprehensive investment strategy is knowing “if your goal is out of reach, you’ll need to adjust your expectations.”

Among the many investment strategies is market timing. Simply defined, when an investor should get into the stock market, or maybe sell some shares or exit a fund.

Is it a popular strategy with financial advisors? No, but many times market timing is driven by investor fear. Whether the market is experiencing a downward trend and investors want to sell their shares, or finding an investment that has outperformed the market and buying at its peak.

Loy stressed that an investment strategies should, “not be driven by the market, but by what you need.”

Market timing is an attempt to buy low and sell high. However, it’s difficult to know when the market is about to turn higher or lower. Staci Scharadin, CEO of Las Vegas-based Diamond Wealth Management, explained that, all too often, it’s difficult for investors to know when the market is reaching its peak, followed by the inevitable sell off and steep decline.

“Investors who try to time the market may have success in the short term,” said Scharadin. “But, over the long term, it is a difficult strategy to be successful with.”

Mitigating Investment Risks

Advisors also urge their clients to review their asset allocation. Asset allocation is simply a strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in a portfolio.

For example, a typical portfolio may be 60 percent invested in stocks, 20 percent in bonds and 20 percent in alternative investments.

“For a 50-year-old executive with a Las Vegas company, typically they are still investing for retirement,” Scharadin said. “They might want to look outside the market, use alternative investments. These are investments not tied to the emotional ups and downs of the market.”

Scharadin said these alternative investments, which some call non-traded investments, include business development corporations, venture capital, private equity, hedge funds, real estate investment trusts, as well as real assets such as precious metals, rare coins and art.

These assets usually perform with low correlation to stocks and bonds, and are generally more illiquid than traditional investments. Liquid alternatives include ETFs, or an exchange traded fund and mutual funds that are traded publically.

“Because alternative investments are assets that are usually not correlated to the stock market, you’ll see the use of self-directed IRAs and allocations to alternative investments rise,” said Theresa Fette, CEO of Provident Trust Group in Las Vegas. “We have seen increased investments in rental real estate and private companies mostly in the last year.”

Fette said her company is specifically seeing a growth of investments in first deeds of trust and private companies in Nevada. But what are the various risks investors take when investing in alternatives and do the risks outweigh the rewards?

“There is risk in all investments,” Fette explained. “To minimize risk, we see our clients diversifying their portfolio among a variety of assets, including traditional assets such as stocks, bonds, and mutual funds. Clients need to remember that there is usually a direct correlation between the amount of risk and the amount of return.”

Fette noted the higher the risk, the higher the return. She also cautioned investors to do their due diligence before choosing an investment. In other words, if there’s a claim of 10 percent returns, don’t just jump in to make the investment.

Fette cited Bloomberg News saying the average investor realizes approximately 3.7 percent returns.

“If you can understand and appreciate the risks involved with any investment, and live with the consequences if any of those risks were to play out, that is usually a good litmus test to determine if it is too risky for you personally,” she said.

Scharadin added alternative investments are good for removing “some of the risk from the markets.” She recommended that 15 to 25 percent of a client’s portfolio be placed in alternative investments.

Scharadin noted that Yale and Harvard universities have 60 to 80 percent of their endowments in alternative investments. She said these alternative investments have “come down to the retail level,” with a minimum of $5,000 invested. Demand for alternative investments stems from investor appetite for lower volatility and diversification. Another reason is the fact that regulatory and financial barriers that kept many small investors away have been relaxed in recent years.

For years, these investments were primarily available to institutional investors or the very wealthy because it meant setting aside large amounts of capital for a very long time. Now there are options with lower minimums such as mutual funds, as well as hedge funds that allow investors to withdraw cash more frequently.

Investment Strategies That Work

Other keys to success include investing early and separating emotions from objectives. Those strategies should include investing in things that are familiar. For example, if a person gambles and spends lots of time and money at casinos in Nevada, advisors will tell them to consider investing in the gaming sector or a particular company.

Another key is to start investing as early as possible. The longer money is invested, the more potential it has to grow and bring the best returns. Also, remember dollar-cost averaging, the process of investing a fixed amount of money in an investment vehicle at regular intervals, typically bi-weekly or monthly.

Scharadin urged investors to be disciplined, continue to invest over an extended period of time, regardless of prices or the ups and downs of the market.

“Don’t get caught up in the hype,” Scharadin said. “Stay on track with your contributions”. In 2008, people got scared, took their money out of the market and never came back. Then in 2014, at the height of the rally, everyone wanted to get back in.”

Loy agreed, saying discipline was key to successful investing, but so is rebalancing a portfolio. Over time, a portfolio’s risk profile may adjust due to the performance of certain investments or economy.

Despite Nevada’s ongoing economic recovery, Loy said he still “finds a lot of people rebuilding their portfolios.”

“The recession had a huge impact on their businesses,” Loy said. “For executives or employees who were laid off or furloughed during the recession, it’s time to regroup. When it comes to rebuilding your portfolio, it’s also about being aggressive. Who is saving more?”

Loy also urged investors to aggressively budget their money, or maybe even downsize their lifestyle to get a handle on their finances.

Post-Recession Investing in Nevada

After adjusting your portfolio or looking to get back into the market, what do executives need to know when it comes to investing in the post-recession environment?

“Whether you’re investing during a recession or a booming economy, it should start with a financial plan that takes your individual situation and goals into account,” said James Corey, vice president and branch manager with Charles Schwab in Southern Nevada. “Most business executives would not start a new venture without a business plan. It should be the same thing for investing.”

Corey, who oversees offices in Las Vegas, Summerlin and Henderson, admitted the global market concerns and uncertainty over when the Federal Reserve will begin to raise interest rates have created a “great deal of volatility in the market.”

“For long-term investors, which most of us are, it’s important to stay focused on the longer term and not be too distracted by shorter term events,” Corey said.

Trusting a Machine with Your Savings

There has been a lot of reports about “robo-advisors.” These automated investment services promise to make investing easy and inexpensive. Typically, a robo-advisor firm provides portfolio management online and no other financial advice, whereas financial planners with more traditional brokerage or wealth management firms provide advice on topics such as insurance, retirement and estate planning.

With a robo-advisor service, the portfolio management is provided through the use of computer models based on basic online goal and risk tolerance assessment tools.

Robo-advisors are operated by well-known brokerage firms and by relatively new names to the industry – FutureAdvisor, Beterment and Wealthfront. Schwab Intelligent Portfolios launched earlier this year.

The paperless platform is available to clients with as little as $5,000 and is free to investors. Before building the portfolio, it takes a client through a 14-question “Investor Profile Questionnaire,” which is designed to capture their behavioral attitude toward risk, which creates a risk willingness score.

Finally, users are asked questions about their age and investment product preferences, which help determine the appropriate set of portfolios.

“We think the introduction of automated investing services as an evolution in the industry, as opposed to a revolution,” Corey said. “An automated investing service like this can be appropriate for an investor who is looking for a different way to invest and who is comfortable using technology to make things more efficient.”

He described Intelligent Portfolios’ client base as half millennials or Gen-X, who are just getting started with investing, while about half are Baby Boomers and Matures. Corey said roughly 15 percent of their clients have $1 million or more invested with Schwab overall.

“Robo-advisory services will be mainstream over the next three to five years,” consulting firm A.T. Kearney concluded in a recent report. By 2020, robo advisors will manage $2 trillion in the U.S., or 5.6 percent of Americans’ investment assets up from 0.5 percent today, the report predicted.

Scharadin added that robo-advisors are here to stay but that personal service will remain important.

“Who are people going to talk to?” Scharadin questioned. “When they are scared, they want to speak with someone. In my world, I’m reaching out to those who might use robo advisors. That personal service is never going to go away.”

Filed Under: Feature Story Tagged With: A.T. Kearney, Bloomberg News, Brian Loy, Charles Schwab, Diamond Wealth Management, James Corey, Las Vegas business, Nevada business, Provident Trust Group, Reno business, Sage Financial Advisors, Staci Scharadin, Theresa Fette

Sponsored Features

Sponsored Features

U.S. Bank’s Good TruckComes to Las Vegas

GC Garcia, Inc. Celebrates 25 YearsAnd Looks Back on Southern Nevada’s Changing Landscape

Las Vegas Valley Water DistrictSupports Local Fire-Fighting Efforts

Behind the ScenesWith a U.S. Bank Goals Coach

Advertise With Us

Advertise With Us. more details ►

Primary Sidebar

Daunting ChallengesMedical Education in Nevada

Industry FocusHealthcare

Time & SpaceArchitectural Design Trends

Cyber SecurityKeeping Your Business Safe

Nevada News & PR Wire

  • Reflection Bay Golf Club Expands Team with Ken Wright

  • Holland & Hart Announces Election of New Partners in 2021

  • OPD5 Extends Temporary Office Closure Due to COVID-19

  • Urology Specialists of Nevada Adds Three New Health Care Providers

  • 2021 Resolutions with M Spa — January Specials for CoolTone by CoolScuplting

  • Elizabeth Pearson Earns Certificate in Principles of Public Relations

  • INOVA Announces Winners and Exhibit in Community Artists’ Campaign

  • Brass Cap Development Closes on Three New Valley Properties

  • Desert Radiology Completes 25 Days of Do-Gooders Virtual Gifting Initiative, Donating to 25 Charities in 25 Days

  • Reno/Sparks Association of REALTORS® Releases December 2020 Existing Home Sales Report

  • Vegas PBS to Host Free Virtual Screening of the Zen Speaker: Breaking the Silence

  • Long-Time Silver State Schools Credit Union Volunteer Leonard Petoske Passes Away

  • Naylor & Braster Recognized in U.S. News Best Lawyers “Best Law Firms” 2021 Edition

  • Goodwill® Among Recipients of $4.2 Billion Funding by MacKenzie Scott

  • St. Jude’s Ranch for Children Begins Healing Center Project for Child Victims of Sex Trafficking with Soil Survey Donated for $1

  • Washoe County Sheriff’s Office and Donor Network West Launch Six-Day “Second Chances” Organ Donation Awareness Program for Minor Traffic Violations

  • Angela Collins Named Chief Operating Officer of Nathan Adelson Hospice; Joins NHPCO’s Quality & Standard Committee

  • NAIOP Southern Nevada Announces Newly Elected 2021 Officers and Directors

  • Immunize Nevada to Host Flu Clinic at Promise Land Community Church

  • Southern Nevada Home Prices End the Year in Record Territory

  • Dickson Commercial Group Represents Buyer of 21,781 Square Foot Medical Office Building

  • Soberlink Joins National Council of Juvenile and Family Court Judges With Corporate Sponsorship

  • Northern Nevada Community Leaders Named to NCET Board

  • Megan H. Hummel Appointed Partner of Lipson Neilson PC

  • Reno/Sparks Association of REALTORS® Installs 2021 Officers and Celebrates Annual Awards

  • Northcap Commercial Arranges Sale of 11.33 Acres of Land for $5,377,268

  • Nathan Adelson Hospice Partners with Six Leading Non-Profit Providers

  • A Plant-Based Change of Pace: Dunkin’ Starts 2021 with the Southwest Veggie Power Breakfast Sandwich

  • Vegas Helps Nonprofit Organization Launches to Facilitate Locals Helping Locals

  • Deadline for Moving Assistance Applications Extended to Jan. 15, 2021 — Move 4 Less Owners Paying for Local Moves of Families Affected by Pandemic —

  • Livestreamed Panel Discussion Will Engage Local Mental Health Experts, Community Leaders, and the PBS NewsHour Student Reporting Lab on the Topic of Youth Mental Health

  • Silver State Schools Credit Union Shares its 2020 Community Giving

  • Jewish Nevada Announces New Board Members and Presents Jewish Community Leader Awards During Virtual Event in January

  • Ava Rose Agency’s Food and Beverage Clients Raise a Glass to Welcome 2021 With New Year’s Specials and Promotions

  • Throw in the New Year With Dueling Axes at AREA15

  • Take (Extra) Charge of 2021: Dunkin’s New Extra Charged Coffee Delivers 20% More Caffeine

  • Non-Profit CORE Welcomes Two New Members to Board of Trustees

  • Non-Profit CORE Treats 70 Scholars and Families to a Drive-Thru Holiday Express

  • Short-Term Career Training is Key to Post-Pandemic Economic Recovery in Las Vegas in 2021

  • Paint Contractor Gives Children Unforgettable Christmas

  • Greater Nevada Credit Union Helps People Live Greater Through Greater Giving Donations

  • Nevada Association Services Pays First Quarter 2021 HOA Assessments for 5 Families Who Lost Their Homes in November Pinehaven Wildfire

  • “Hope for the Holidays” Presented by Hope for the City Wraps With Immersive Drive-Thru Food Pantry

  • Nevada Rural Housing Authority Receives Two Excellence Awards from the National Association of Local Housing Finance Agencies

  • Dickson Commercial Group Completes 36 Acre Land Sale in North Valleys

  • Las Vegas Real Estate Company Focuses on Neighborhoods & Communities

  • Justice Mark Gibbons to Retire from Nevada Supreme Court

  • Spencer Fane LLP Partner Ayesha Mehdi Named to American Bar Association Health Law Section Vice Chairships

  • Newly Constructed Industrial Complex Sells for $6.8 Million in Southwest Las Vegas

  • TSK Architects Promotes from Within

  • USDA Recognizes Greater Commercial Lending As #1 Business and Industry Lender in Top Commercial Lender Rankings

  • Serving our Kids Foundation Hosted Contactless Food Drive with Sponsors Clark County Medical Society Alliance, Southwest Medical, OptumCare and SOS Radio

  • Attorney Leon F. Mead II Receives Recognition for Legal Excellence for 2020 Super Lawyers® Award

  • Mendy Elliott Named Nevada Donor Network Foundation Founding Board Member

  • John Naylor Represented British Columbia Securities Commission in Landmark Decision From Nevada Supreme Court

  • Young Entrepreneur Spills Insight on Launching a Podcast

  • The Private Bank by Nevada State Bank’s High Net Worth Report Summarizes Charitable Giving Trends Impacted by TCJA

  • Application Is Now Open for the Cannabis Equity and Inclusion Community (CEICNV) NCCRFund Grant Program in Nevada

  • Adam S. Kutner, Injury Attorneys Wins “Best Accident Lawyer” in the Las Vegas Review-Journal’s “Best of Las Vegas” Reader’s Poll

  • An Outpouring of Support for Las Vegas Cyclist Memorial: Lamar Advertising Donates 68 Billboards

  • Lake Las Vegas Named #1 Southern Nevada Master Plan

  • St. Vincent’s Thrift Stores Offer Unique Gifts

  • William V. Craig, M.D. Joins Nathan Adelson Hospice in Pahrump

  • Behavioral Health NV Encourages Families to Find Substance Use Help During the Holidays

  • Project Worth Encourages Problem Gamblers to Seek Change this Holiday Season

  • JB Public Relations – Boutique Public Relations & Social Media Agency Offers Free Initial PR Crisis Communications and Consultations for Small Businesses in Las Vegas During the COVID-19 Pandemic

  • Move 4 Less Owners Provide Moving Help for Families Being Evicted, Affected by the Pandemic — Applications DUE by Dec. 31 —

  • D’Agostino’s Trattoria Offers Holiday Gift Baskets, In-Dining Specials, and Signature Festive Drink to Ring in the Season

  • MGM Resorts Selects TuffSkin Surface Protection for Leadership Program

  • Kelly LeGrow Named Nevada Donor Network Foundation Board Member

  • BRAZEN Architecture Founder Receives AIA Nevada’s First Ever “Citizen Architect” Honor

  • ‘Weekend College’ Launches at CSN – Designed for Busy Students, Programs in Business, IT, Healthcare and More Are Available

  • Faith Lutheran Middle School & High School Breaks Ground New $3.4 million Tennis Complex

  • Goettl Air Conditioning and Plumbing Looking to Hire Call Center Representatives Throughout Las Vegas

  • Trosper Public Relations Adds to Team

  • Clinician Experience Project Recognizes Southwest Medical Physician

  • Goodwill® of Southern Nevada Names New Chief Human Resources Officer

  • Dermody Properties Leases Remaining Space at LogistiCenter℠ at Speedway in North Las Vegas

  • Rita Vaswani Named Nevada Donor Network Foundation Founding Board Member

  • Nevada State Bank Wins “Best Bank” in Las Vegas Review-Journal Poll for Fourth Straight Year

  • Community Support Needed to Help Homeless Youth for the Holidays –Donate Gifts or Host a Drive–

  • SR Construction Makes Donation to St. Jude’s Ranch for Children

  • Colliers Las Vegas Broker Recognized as Broker of the Year by Prestigious Industry Society

  • Fernley Community Foundation Celebrates Progress with Polaris Grant, New Senior Center Opening

  • Vegas PBS Selects Mary Mazur as New President and General Manager

  • Silver State Schools Credit Union Receives Gold Award for “Best Credit Union” with the 2020 Best of Las Vegas Award

  • Coral Academy Awarded Gold in Four Categories for Best of Las Vegas Awards

  • Blume Kitchen & Cocktails Plans Pop-up Dinner Featuring Chef Lanny Chin Mon., Jan 11

  • NAWBO Southern Nevada Awards Henderson Councilwoman Michelle Romero With Corporate & Government Services Award

  • Nevada State College’s Early Childhood Education Center to Open Fall 2021 Within the New $61.8m School of Education Building

  • Justice Mark Gibbons Honored at Virtual Pro Bono Awards Luncheon

  • Foster Youth and Adoption Agency Mountain Circle Family Services, Inc. Celebrates 35 Years With New Name, Same Community Focus

  • Nevada REALTORS® Present Annual Awards, Including Honoring Chris Bishop as Its REALTOR® of the Year

  • Blume Kitchen & Cocktails and the Stove Host Holiday Drive-Through Experience to Distribute Meals and Essentials

  • Reno Experience District’s First Luxury Apartment Building is Now Open

  • Founders of a Boutique Design Firm Spill Insights on Building a Team and a Partnership With Intentional Leadership

  • “Angels of Las Vegas” to Hold Fundraising Gala to Benefit Children With Cancer

  • National Council of Juvenile and Family Court Judges Form New Ad Hoc Committees to Strengthen Partnerships with Court Management and Tribal Courts

  • Nevada’s Silver State ACO Saved Medicare $48 million in 2019

  • Silver State Schools Credit Union Announces Winners for the 35th Annual Happy Times 2021 Calendar



 
Submit Your News & PR | Subscribe
Submit Your News & PR

Business Connection

Business Connection Portal

Log In Sign Up

Business Connection Portal

Log In Sign Up

Nevada Business Calendar

  • Ely Film Festival 2021
    March 12, 2021 12:00 pm

    Location: 501 E Aultman St, Ely, NV 89301, USA

    More details...
  • Ely Film Festival 2021
    March 12, 2021 12:00 pm

    Location: 501 E Aultman St, Ely, NV 89301, USA

    More details...
View Full Calendar ►

Nevada Business Directory

Featured Businesses
Find a Nevada-Based Business Submit Your Business Subscribe to the Nevada News & PR Wire

Nevada Industries

Architects & Engineers
Arts & Culture
Banking
Commercial Real Estate
Construction
Credit Unions
Economic Development
Education
Financial Management
Healthcare
Human Resources
Insurance
Law
Manufacturing
Marketing
Media
Mining
Philanthropy
Residential Real Estate
Rural Nevada
Sports
Tax Planning and Accounting
Technology
Telecom
Tourism
Transportation
Utilities

Footer

Subscriptions

  • Print Subscription
  • Mobile App
  • E-mail Subscription

Editorial

  • Features
  • Departments
  • Events

Advertising

  • Advertise
  • Submission Requirements

Connect

  • Contact
  • LinkedIn
  • Facebook
  • Twitter

Copyright © 2020, Business Link LLC dba Nevada Business Magazine and Nevada Business Journal. Privacy Policy | Terms & Conditions
Nevada Web Design services by Nevada Central Media using Genesis Framework by StudioPress