Portfolio Strategy
I divide a portfolio into 3 main segments. The allocation between segments will be optimized for the client's situation and needs.
My goal as a planner is to outperform the S&P 500 Index while generating income to reduce overall portfolio volatility.
To achieve this goal I will:
Assess the Macro-Economic situation of countries.
Deflation vs Inflation
Currency Strength
Government spending and debt
Taxes
Overall business climate
Political Stability
Select favorable countries to invest in.
US
Established Foreign Countries
Emerging Market Countries in Asia and South America
Identify Industries and companies with stable growing earnings
Additionally it is important to manage risk.
Diversification across countries can reduce volatility.
Diversification across companies and industries provides safety from unforeseen events.
Example: Earnings collapse at AIG in 2008.
Example: Financial scandal at Enron in 2004.
Dividend Income offers safety during market corrections.