Is Your Portfolio Too Risky?

When it comes to money, most people prefer a predictable approach; they feel secure with the regular schedule of a paycheck or the guarantee of a reliable income. There are some who may find a thrill in the possibility of a riskier and potentially more profitable investment, but their worry exceeds their optimism. Understanding the actual level of risk can make a huge difference.

The calculated risks investments demand isn’t for everyone. However, for Goldstone Financial Group founder and principal Anthony Pellegrino, assessing risk is a way of life. Anthony Pellegrino has built his career on determining good investments from bad investments while guiding his clients towards a secure financial future. Assessing and determining the level of risk in investments, he explains is one of the most important aspects of his job - mainly because many of the people he connects with do not realize how risky their portfolio really is.

“I can’t tell you the number of times I’ve had retirees with sizable nest eggs come in with high-risk portfolios, that they are unaware of,” Anthony Pellegrino shares. “They might have a million or more tied up in risky investments and do not realize that they’re one bad market downturn away from losing the money they need to carry them through retirement.”

As Pellegrino explains it, determining the level of risk is one of the first steps a Goldstone Financial Group advisor will take when establishing a relationship with a client. Part of this, Pellegrino goes on to say, hinges on the advisor’s ability to understand the client’s situation as a whole. In some cases, aggressive or risk-laden tactics might be useful; a corporate executive with secure income sources and significant investment knowledge might feel comfortable with a higher level of risk in the hopes of garnering substantial returns. In contrast, a retiree who has spent the last forty years developing a nest egg and no longer has the security of a diversified income usually is not comfortable with this type of aggressive tactic. The latter would be more conservative and target investments that were highly secure, if not guaranteed.

Goldstone Financial Group’s pursuit of client comfort and its preference for well-tailored portfolios is admittedly rare in the financial sector. Most advisors tend to offer cookie-cutter investment options after performing a cursory assessment for risk tolerance. Some, Anthony Pellegrino warns, might not have their client’s best financial interests at heart. There are some advisors, he explains, that may be more interested in receiving a commission off of the investment products they sell than helping their client establish the portfolios they need.

Clients never have to worry about their advisors’ motivations at Goldstone, however; every advisor at the firm is a licensed fiduciary.

“Our fiduciary status means that we have both a legal and moral obligation to put our clients interests above our own,” Pellegrino states. “We will tell you if we think your portfolio is too risky or could benefit from an additional degree of risk - and we will always keep your financial health in mind.”

“At Goldstone Financial Group, we implement what those in the financial sector refer to as a Tactical Asset Management Approach. I’d say most folks are more familiar with a “buy and hold” strategy - that is, buying assets and keeping them through both good and bad times.” A TAM strategy, Pellegrino continues, is not nearly so static.

With TAM, trained investment professionals use algorithms to assess the risk of a downturn and weigh it against the portfolio’s tolerance. If they believe the danger to be too high, they can move investments into a more defensive position or turn the client’s assets into cash. These strategies protect investments from significant adverse fluctuations in the market and ensure that clients’ portfolios emerge from periods of instability relatively unscathed. A dynamic TAM approach can make a world of difference for a client’s portfolio - however, Anthony Pellegrino stresses that active strategies like TAM should never be attempted without guidance from a fiduciary advisor.

It isn’t enough to allow portfolios to run in the background; instead, they should be actively monitored and periodically assessed. Anthony Pellegrino believes investors can only have the ability they need to make effective decisions if they fully understand the risks of investments and can judge what degree is best for them given their goals, income, and career progression. A fiduciary can help an uncertain investor regain control over their investments and make risk adjustments to their portfolio as needed.

Regardless of whether a client chooses to sign on with Goldstone Financial Group or invest alone, they need to be well-informed of their investments and in touch with their risk preferences at all times. Otherwise, they are in danger of losing out on opportunities for financial gain - or sacrificing their hard-earned profits altogether.

Investment Advisory Services offered through Goldstone Financial Group, LLC a Registered Investment Advisor (GFG). GFG is located at One Lincoln Centre, 18W140 Butterfield Rd., 14th Floor, Oakbrook Terrace, IL 60181, Telephone number – 630-620-9300.