n INDIVIDU AL


Informed Choices: T


FROM PRESIDENTS TO PORTFOLIOS


he upcoming election is about to culminate, with many voters espousing the view that there are no good choices available. Does this viewpoint apply to the current investing environment?


Brandon K. Adams, Wealth


Management Analyst


A LITTLE BACKGROUND When constructing investment portfolios, at the most basic level, three investment options exist: equity, debt, and cash. Being supported by data, our Wealth Management team believes that equity, in general, is the best investment vehicle


to achieve the future financial goals of our clients. However, we can’t invest 100% in stocks (one form of equity) because of the risk (think 2008); therefore, before we can recommend a portfolio, a client must decide on an acceptable risk tolerance. To make money, a client must take a certain amount of risk, but must also be comfortable with the risk.


APPLICATION Diversified client portfolios are designed to hold equity (growth) and debt (protection), with the weightings of each asset class being determined by the degree of risk a client is willing to accept. Today’s investment environment offers a particularly challenging environment for managing portfolio risk. Both options (equity and debt) are what investors call “fairly valued”; this means there


is no clear, easy choice as to what to buy to gain an advantage on appreciation.


Since no easy solution exists to protect portfolios, the team has had to explore other investment options. Te team looked for bond substitutes (assets that will offer protection to portfolios, but are not bonds). Examples of these are investment products like


The good news is, unlike with an election, we don’t have to put all of our financial “eggs” in one candidate’s basket.


high-dividend stocks, “long” or “short” funds, and other multi- strategy funds. From a voter’s perspective, finding bond substitutes is similar to looking at third-party presidential candidates as an alternative to the Democratic or Republican candidates.


Te good news is, unlike with an election, we don’t have to put all of our eggs in one candidate’s basket. We can sprinkle in just enough “third party” flavor to achieve diversification. So, when no good choices are inherently obvious, Ambassador Advisors strives to create the best individualized portfolios, balancing growth and protection within client risk tolerance.


4 • Ambassador Advisors


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