How Professional Investment Planning Can Protect Your Portfolio This Earnings Season
We are currently approaching earnings season! Over the next couple of weeks, many of the world’s major public companies will share their Q3 financial results, and projections for the remainder of the year. As new information becomes known about company performance, investors adapt their expectations and markets factor this in. As a result, this period is typically a time of heightened volatility in markets as stock prices fluctuate based on whether results meet, exceed, or miss investor expectations.
For those who’s investments are concentrated in undiversified portfolios, this can present serious risk. While strong earnings report may lead to gains, disappointing results could lead to significant losses, particularly if portfolios are over-exposed to a single sector or geographic region. On the other hand, in well-diversified portfolios the risk is spread across different sectors and around the globe, losses in some areas are therefore more likely to be offset by gains in others.
The importance of professional investment planning in uncertain periods cannot be overstated, and working with a financial advisor to optimise your investments can significantly strengthen your position in a number of ways:
Comprehensive Portfolio Analysis:
Over-exposure to specific sectors, regions, or asset classes can leave your portfolio vulnerable to heightened volatility. Working with a financial advisor, you benefit from thorough analysis of your existing investments, ensuring that any overexposure is identified and addressed before it becomes a source of instability. An advisor can help rebalance your portfolio to better withstand market fluctuations, ultimately protecting your long-term financial goals.
Tailored Risk Assessment:
Attitude to risk varies between every investor. Some are willing to take greater risk with the goal of higher returns, while others have a primary goal of taking minimal risk to preserve capital. It’s crucial that your investments reflect your personal risk tolerance, particularly in times of market volatility. Working alongside a professional advisor will ensure that your investments are carefully aligned with your risk profile, to strike the balance of risk and return that is specific to your preference.
Professionally Constructed Portfolios:
Working with a financial adviser gives you access to professionally constructed portfolios, designed to achieve consistent returns while mitigating market volatility. Advisors use diversification and strategic fund selection to reduce exposure to specific risks, creating a more resilient investment strategy. With professional oversight your portfolio can be well-positioned for both short-term market changes and long-term success.
Active Portfolio Management:
At Humboldt, we take an active approach to portfolio management, selecting and adjusting funds based on current economic and market conditions. With ever-changing and uncertain economic conditions, the importance of regularly assessing the makeup of your portfolio cannot be understated.
If you are concerned that your portfolio may be exposed to fluctuating market conditions, now is the time to act. Speak out to one of our expert advisors today to ensure that your investments are equipped to withstand market volatility, safeguarding your financial goals.
