Financial Advisor Archives - Willamette Investment Advisors

Bonds Can Be Risky

If you own individual bonds or bonds within mutual funds, you may want to start taking a more cautious approach to your bond investing. Although bonds are typically considered a relatively safe investment, we may be entering a period where bond prices could be volatile. We are seeing signs that interest rates could be moving up in the near future. Rising interest rates are not a good thing for bond investors as bonds generally lose value when rates rise. For example, if you own a bond that matures in 10 years, or own a bond fund with an average maturity of ten years, a 1% rise in interest rates could cause your bond investment to decrease in value by as much as 10%. There are ways to protect, or at least mitigate potential loss in this type of a scenario. Give us a call if you’d like to discuss this in more detail.

Bonds Can Be Risky Brian Robertson 2022-11-25T23:11:12+00:00

Core Investing Beliefs Part 2: Managing an Investment Portfolio

In the last post, we talked about our first core investing belief, that asset allocation is the most important decision in investment management. This post introduces our second core investing belief, that changing financial markets require continuous monitoring and tactical flexibility. This philosophy is contrary to the typical buy-and-hold approach that investors have been persuaded to embrace. Many people are convinced the proper way to invest is to simply leave their money in the market and hope for a decent return. We believe there is a better way! We feel investors should emulate the large, institutional investors by taking a more sophisticated, tactical approach to investing. At Willamette Investment Advisors, we maintain a forward-looking investment process that is focused on long-term trends in the financial markets. So, depending on what is taking place in the financial markets, we adjust our clients’ mix of investments to both mitigate risk and take advantage of investment opportunities. With record low interest rates and extreme stock market volatility, how are your investments positioned for what lies ahead? Give us a call; we’d love to discuss it with you.

Core Investing Beliefs Part 2: Managing an Investment Portfolio Brian Robertson 2022-11-25T23:11:12+00:00

Core Investing Beliefs Part 1

We have 2 primary investment beliefs: 1) That asset allocation is the most important decision in investment management. 2) That changing financial markets require continuous monitoring and tactical flexibility. This post focuses on asset allocation and we’ll address the second core belief in the next post. Asset Allocation is simply the term we use in the financial industry to describe how your money is invested in all of the various investment options available, and in what proportion. For example, if you have a financial advisor making the asset allocation decisions for you, they are deciding how much you should be investing in US Large company stocks, how much in bonds, international stocks, etc. An important study by two Nobel Prize winning researchers highlights the importance of asset allocation in investment returns. They found that over 90% of the variance in an investment portfolio is determined by how the assets are allocated. Other factors such as stock selection and timing, while still important to consider, only represent a small portion of an investor’s return. For example, back in 1999 when the stock market was up over 50%, it didn’t matter if you owned Microsoft, General Electric, or IBM, you still made a lot of money. But, in the crash of 2000/2001, owners of those investments lost money while even a mediocre bond fund had a positive return. So, rather than spending the majority of your time deciding between two similar stock investments, it is much more important to figure out whether you should invest 30% or 60% of your portfolio in stocks (or any stocks at all for that matter). We help our clients with these important asset allocation decisions and closely monitor and adjust their asset allocation as the financial markets change.

Core Investing Beliefs Part 1 Brian Robertson 2022-11-25T23:11:12+00:00

Finding The Right Financial Advisor

I recently re-read a few chapters of a good introductory book on investing called “The Art of Investing & Portfolio Management.” I think one of the best chapters for individual investors to read is the chapter on what to look for when selecting a financial advisor. Here are the bullet points (I’ve given you some expanded excerpts on the first two as I feel these are of critical importance): 1) The Advisor Is a Registered Investment Advisor (RIA) “We strongly encourage you to work only with professionals who… are RIA’s. The reason: RIA’s have a legal fiduciary responsibility to provide their clients with the highest possible standard of care. As a fiduciary, an RIA is required by law to always look out for your best interests and to completely and objectively disclose all important information in his or her dealings with you. By contrast, a stockbroker is not legally required to always work in your best interest.” 2) The Advisor Uses a Fee-Based Compensation Structure “You’ll pay a fee-based advisor a percentage of your portfolio’s assets each year, as opposed to a commission on each transaction. As a result, a fee-based advisor’s interests are aligned with you own: The advisor does well only if your portfolio does well.” 3) The Advisor Is Consultative 4) The Advisor Incorporates Superior Capabilities at All Stages of the Process 5) The Advisor Is Someone with Whom You Feel Comfortable Working Note: I am an Investment Advisor Representative (IAR) of KMSFinancial Services, Inc., a federally Registered Investment Advisor(RIA).

Finding The Right Financial Advisor Brian Robertson 2022-11-25T23:11:13+00:00