Your Mid-Year Portfolio Check-Up in Four Easy Steps

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The year’s half-way over. Now is the perfect time to review your financial situation and your portfolio and make adjustments as needed – to ensure you are on track to meet your financial goals. Ready to get started?

Gold bars on US dollar banknote money,

Step 1: Evaluate your risk exposure.

Markets are changing, economic conditions are evolving and your financial goals may have even shifted from the last time you reviewed your portfolio. Take some time to consider how much “risk” you have in your portfolio.

The S&P 500 dropped nearly 20% in 2022. What would another big drop in the stock market mean to you? Would it hurt a near-term financial goal, perhaps a down payment for a home or even your retirement, if you plan to retire in the next several years? Be honest about your risk tolerance level. How you would feel if the equity portion of your portfolio dropped 20% from current levels.

If you have specific goals for your money in the next three to five years, experts often advise you not to invest those assets in the stock market. The reason? During down markets, history shows it can take up to five years for the broader equity market to move back to the breakeven point.

Step 2: Review your asset allocation mix.

Diversification is one of the key elements to successful investing. That simply means gaining exposure to different asset classes like stocks, bonds, tangible assets like physical gold and silver, and even cash. Do the math and calculate how much you currently have allocated to each asset class.

Risk-averse investors generally try to build portfolios in a way that reduces volatility without giving up overall returns. Research shows that both gold and coins have low betas, which means they are both effective assets for improving a portfolio’s performance without sacrificing return.

Blanchard believes that gold and silver bullion in physical form is an appropriate asset for a portion of any properly diversified investment portfolio and recommends investing up to 10% of your overall portfolio in gold, depending on your financial goals and risk tolerance levels.

Step 3: Calculate your liquid assets.

Having access to cash in a hurry when you need it is an essential part of any financial plan. Whether this is a cash reserve fund held in a high-yield savings account, or even held in physical metals (which can be sold instantly if you need dollars), having access to ready cash is important.

Experts typically recommend holding six months of living expenses in a cash reserve account. Or, if you are in retirement, holding up to three years of living expenses in a liquid account is key to ensuring you don’t have to pull out of investments potentially at a loss when you need money.

Physical gold can be considered for a portion of your liquid assets funds. Gold is considered a highly liquid asset because it’s easy to buy and sell. The market for gold is huge, global, and liquid. Gold prices are published 24/7 and gold can be readily sold anytime.

Step 4: Implement changes to your portfolio.

After you’ve reviewed, calculated, and considered the above, take steps to adjust your portfolio. This could include strategies like selling out of a portion of your equity exposure and buying physical metals, opening a self-directed IRA account to add physical gold and other precious metals to your retirement savings, or shifting a portion of your cash reserves into physical metals.

Want a second opinion? Get help from a professional.

If you’d like to discuss your financial goals with a Blanchard portfolio manager, give us a call today. We will take the time to learn your investment objectives, investment time horizon, and risk appetite before making any personalized recommendations for your consideration. We can also answer questions on topics including IRAs, inheritance, storage, and diversification. We’re here to help.

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