 |
| Adrian Mastracci, president
of KCM Wealth Management says, "Start
polishing your plan by asking yourself what
is important about money to you." |
For Immediate Release
Vancouver, BC (September 19, 2001): We've
just experienced a disaster of immense proportions
while in the midst of a gripping bear market.
Adrian Mastracci, fee-only investment
counsel & financial advisor with Vancouver's
KCM Wealth Management, comments, "Our
investment confidence continues to be shaken and
put under severe test by the recent events in
New York and Washington. Not to mention the major
global markets heading lower."
"Investors are wondering where this malaise
will lead us in the months ahead," continues
Mastracci, "There is no safe market to take
refuge. But these trying markets will turn one
day."
"Many investors continue to devote too much
time to the selection process and not enough time
to the investment policies and strategies they
will follow to attain their unique goals."
says Mastracci, "Too often, this results
in a collection of scattered investments."
"Investors are frustrated with the prospect
that nothing they do seems to work. Practically
all investment game plans are feeling some bruises,"
notes Mastracci, "However, there is one simple
strategy. The most rewarding step for investors
is to polish the tattered investment game plan."
"So let's step away from the fray far enough
to get your financial house in order by applying
some long overdue polish to the tattered game
plan," suggests Mastracci, "It wouldn't
hurt."
Mastracci offers these four steps to revitalize
your game plan:
1. Ask yourself the question,
"What is important about money to
you?"
- Is it a comfortable retirement for you and
your family?
- Is it the preservation of your current portfolio?
- Is it long-term growth of your portfolio?
- Is it your small business, RRSP or RRIF?
- Is it minimizing probate fees and income taxes?
- Is it leaving an estate to your loved ones?
Be candid with the answers and they will steer
you towards your chosen destination.
2. Plan for the worst scenario
Keep your finger off the panic button. Bear
markets and severe drops are a natural part of
your investment experience. Savvy investors have
learned to factor in the effects of a prolonged
bear market into investment expectations. You
should do the same.
3. Apply polish to your game plan
Take the time to review your investment game
plan, which contains all the strategies you will
follow to reach your chosen goals. Here are some
specific areas to assess:
- Understand the size of portfolio required
to sustain your desired financial independence.
- Calculate your personal rate of return required
to achieve financial independence.
- Make that personal rate of return the "minimum
portfolio investment return" being pursued.
- Be mindful of the amount of risk you can tolerate.
- Check that your investment personality matches
your portfolio composition.
- Ensure that your investment time horizon is
at least 5 years.
- Make sure the asset mix is prudent for your
situation.
4. Asset allocation, asset allocation
Concentrate on asset allocation. The 1990 Nobel
Prize winning studies concluded that long-term
investment decisions have the greatest impact
on your portfolio returns, not stock selection
nor market timing.
Asset allocation decisions explained, on average,
94% of the contribution to total return.
Clearly, this is an important focus for every
portfolio.
"For my clients, the centerpiece to financial
success is the game plan that outlines the investment
policies they will follow to reach their unique
personal goals," comments Mastracci, "Building
your home and your portfolio have one common thread;
things go far better if you start with a blueprint."
"The incentive to polish the game plan is
that you avoid virtually all the common investment
pitfalls and mistakes," notes Mastracci,
"This alone is sufficient reason to get going."
"It's really quite simple," Mastracci
concludes, "Investors who focus on their
investment policies make more appropriate investment
decisions and are rewarded with returns more in
keeping with expectations."
"Be prepared because it's going to be choppy,"
summarizes Mastracci, "Grip the steering
wheel firmly, keep your eyes on the horizon and
stay the course with your polished game plan."
|
