Constructing Your Investment Portfolio

Transcription

Constructing Your Investment Portfolio – Advanced
Strategies to Reduce Volatility and Enhance Returns
2014 FPANY’s 12th Annual Financial Fitness Workshop
Presented by: Lewis J. Altfest, CFP®, CFA, CPA, PFS
Chief Investment Officer and Principal Advisor
Andrew Altfest
Executive Vice President
September 27, 2014
© Altfest Personal Wealth Management, 2014
Outline
•
Steps to Construct an Investment Portfolio
•
Risk Tolerance and Asset Allocation
•
Behavioral Factors
•
Economic Outlook
•
Stock Market Outlook
•
Sample Portfolio vs. Alternative Portfolio
2
Steps to Construct an Investment Portfolio
•
Become familiar with investment alternatives
•
Choose a passive or active approach
• If you choose passive, the other steps are easier
•
Select mutual funds or individual stock and bonds
• It’s ok to have a blend
3
Consider Alternative Investments
•
Real estate
– Not correlated
– Private vs. public
•
Commodities
– Inflation hedge
– Gas
•
Hedge funds – Hedge like
– Do mutual funds
4
Investigate Individual Issues
•
Passive
– Vanguard, Fidelity, Schwab, ETF
•
Active
– Look at Morningstar rankings
– Don’t buy hot funds
– Make sure portfolio manager is still there
– Look for consistency of returns
• High energy component can make funds look good
5
Establish Your Risk Tolerance
•
Umbrella Index
– Inverse of stock vs. bond
– 20%, 33%, 50%, 67%, 80%, no umbrella
•
Know yourself
– Don’t have a different risk tolerance for the current marketplace
•
How risky are you?
– Conservative
– Moderate
– Aggressive
6
TPM
TM
Traditional View of Investments
Stocks and Bonds
Total Portfolio Management
Assets
Financial Real Human
Assets Assets Assets
Stocks,
Bonds
House
Salary
Human
Related
Social
Security,
Pension
Liabilities
Financial
Other
Mortgage,
Credit Card
Non-Discretionary
Costs
7
Handy Rules of Thumb
•
Don’t buy what you don’t understand
•
Invest for long-term performance
– That’s what Warren Buffett does
•
Consider an advisor
– Fee-only
•
Buy value – alternative 1
– Out of favor
– Lean toward contrarian
•
Rebalance – alternative 2
8
Be Aware of Behavioral Factors
•
Why people underperform
•
Overconfidence
•
Use your mind, not your heart
•
Women are better than men
9
Economic Outlook
•
Economy
•
Yellen
•
Inflation - not necessarily a problem
•
The Deficit
•
Fundamentally nothing wrong with U.S.
– Building Sector
– Fracking
10
Source: BEA, FactSet, J.P. Morgan Asset Management. Data are as of 6/30/14.
11
Source: BEA, FRB, J.P. Morgan Asset Management. *2Q14 household debt service ratio and household net worth are J.P.
Morgan Asset Management estimates. Values may not sum to 100% due to rounding. Data are as of 6/30/14.
12
Source: Census Bureau, FactSet, J.P. Morgan Asset Management. Data are as of 6/30/14.
13
Source: U.S. Treasury, BEA, CBO, St. Louis Fed, J.P. Morgan Asset Management. Note:
Note: Years shown are fiscal years (Oct. 1 through Sep. 30). 2014 numbers are CBO
estimates as of April 30, 2014. Data are as of 6/30/14.
14
15
Relationship Between Bond Prices and Yields
When yields increase, bond prices decrease
16
What is Interesting
•
Bonds
•
Municipals
•
Large and Small Cap
•
International
•
Risk Management
•
Oil vs. Gas
•
Real Estate
•
Limited Partnership
17
Source: Barclays Capital, U.S. Treasury, FactSet, J.P. Morgan asset Management.
*Excludes maturities of 13 months or less and private placements. 2014 issuance data is
as of May 2014. Data are as of 6/30/14.
18
Crude Oil vs Natural GAS
19
Source: Census Bureau, J.P. Morgan Asset Management. Monthly mortgage payment assumes the prevailing 30-year
fixed-rate mortgage rates and average new home prices excluding a 20% down payment. Data are as of 6/30/14.
20
Source: Census Bureau, National Association of Realtors, J.P. Morgan Asset Management. Data are as of 6/30/14.
21
- Sample Portfolio
- Alternative Portfolio
22
- Sample Portfolio
23
- Sample Portfolio
24
- Sample
- Altfest
Portfolio
Sample
PortfolioPortfolio
25
LEWIS J. ALTFEST, PH.D, CFP ®, CFA, CPA/PFS
Lewis J. Altfest, Ph.D., is CEO, Chief Investment Officer, and a Principal Advisor for Altfest Personal Wealth
ManagementSM. Prior to founding the firm in 1983, he was a General Partner and Director of Research for
Lord Abbett & Co. Lew began his investment career as a research analyst at Wertheim & Co.
Lew was the sole recipient of the 2007 Charles R. Schwab IMPACT Award ® – arguably the highest distinction in
the profession – for his sustained vision, outstanding leadership and client commitment. He was named one
of the “Best Financial Advisers” in the country by Barron’s, as well as by Money, Worth, Mutual Funds,
Medical Economics, and Dental Practice Report magazines. In 2012, he was named to Financial Advisor
magazine’s 2012 Due Diligence/Research Manager All-Star Team. His academic textbook, Personal
Financial Planning, was published by McGraw Hill and is currently used at leading universities around the
country.
Lew is an Associate Professor of Finance at the Lubin School of Business at Pace University, where he teaches
financial planning and investments. Previously, he was co-director of the Investment Program at the New
School. In addition to the books listed above, Lew is the author of many scholarly articles on financial
planning and investments.
A founding member of the National Association of Personal Financial Advisors (NAPFA), Lew has served on its
Board of Directors. He was selected as one of NAPFA’s 30 Most Influential in 2013. He also is a member of
the Financial Planning Association (FPA), Academy of Financial Services, Financial Management
Association, American Finance Association, American Institute of Certified Public Accountants (AICPA) and
the New York Society of Security Analysts.
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ANDREW ALTFEST
Andrew Altfest is Executive Vice President for Altfest Personal Wealth ManagementSM. He is also an
active member of the Portfolio Action Group, which sets investment strategy for portfolios, and a
member of Altfest’s Investment Committee. Andrew was named to Financial Advisor magazine’s
2012 Due Diligence/Research Manager All-Star Team. Additionally, he leads the firm’s efforts in
the tax management of investment portfolios.
Andrew joined the firm in 2003. He received his B.A. with honors in English from Cornell University
and his M.B.A. from Columbia University’s Graduate School of Business, where he served as
head of The Honor Board.
He has spoken at local universities, industry conferences and the American Association of Individual
Investors, and has appeared in the press, including The Wall Street Journal, Bloomberg
News, and Dow Jones Newswire. Andrew is a member of the National Association of Personal
Financial Advisors (NAPFA).
27
Altfest Personal Wealth Management
425 Park Avenue, 24th Floor
New York, NY 10022
212 406 0850
www.altfest.com
28

Constructing Your Investment Portfolio

Transcription

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