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Creating an Investment Portfolio

Creating an Investment Portfolio

You’ve identified your goals and done some basic research. You understand the difference between a stock and a bond. But how do you actually go about creating an investment portfolio? What specific investments are right for you? What resources are out there to help you with investment decisions? Do you need a financial professional to help you get started?

A good investment portfolio will spread your risk

It is an almost universally accepted concept that most portfolios should include a mix of investments, such as stocks, bonds, mutual funds, and other investment vehicles. A portfolio should also be balanced. That is, the portfolio should contain investments with varying levels and types of risk to help minimize the overall impact if one of the portfolio holdings declines significantly.

Many investors make the mistake of putting all their eggs in one basket. For example, if you invest in one stock, and that stock goes through the roof, a fortune can be made. On the other hand, that stock can lose all its value, resulting in a total loss of your investment. Spreading your investment over multiple asset classes should help reduce your risk of losing your entire investment.

Asset allocation: How many eggs in which baskets?

Asset allocation is one of the first steps in creating a diversified investment portfolio. Asset allocation means deciding how your investment dollars should be allocated among broad investment classes, such as stocks, bonds, and cash alternatives. Rather than focusing on individual investments, asset allocation approaches diversification from a more general viewpoint. For example, what percentage of your portfolio should be in stocks? The underlying principle is that different classes of investments have shown different rates of return and levels of price volatility over time. Also, since different asset classes often respond differently to the same news, your stocks may go down while your bonds go up, or vice versa. Though neither diversification nor asset allocation can guarantee a profit or ensure against a potential loss, diversifying your investments over various asset classes can help you try to minimize volatility and maximize potential return.

So, how do you choose the mix that’s right for you? Countless resources are available to assist you, including interactive tools and sample allocation models. Most of these take into account a number of variables in suggesting an asset allocation strategy. Some of those factors are objective. Others are more subjective, such as your tolerance for risk or your outlook on the economy. A financial professional can help you tailor an allocation mix to your needs.

More on diversification

Diversification isn’t limited to asset allocation, either. Even within an investment class, different investments may offer different levels of volatility and potential return. For example, with the stock portion of your portfolio, you might choose to balance higher-volatility stocks with those that have historically been more stable (though past performance is no guarantee of future results).

Because most mutual funds invest in dozens to hundreds of securities, including stocks, bonds, or other investment vehicles, purchasing shares in a mutual fund reduces your exposure to any one security. In addition to instant diversification, if the fund is actively managed, you get the benefit of a professional money manager making investment decisions on your behalf.

Choose investments that match your tolerance for risk

Your tolerance for risk is affected by several factors, including your objectives and goals, timeline(s) for using this money, life stage, personality, knowledge, other financial resources, and investment experience. You’ll want to choose a mix of investments that has the potential to provide the highest possible return at the level of risk you feel comfortable with on an ongoing basis.

For that reason, an investment professional will normally ask you questions so that he or she can gauge your risk tolerance and then tailor a portfolio to your risk profile.

Investment professionals and advisors

A wealth of investment information is available if you want to do your own research before making investment decisions. However, many people aren’t comfortable sifting through balance sheets, profit-and-loss statements, and performance reports. Others just don’t have the time, energy, or desire to do the kind of thorough analysis that marks a smart investor.

For these people, an investment advisor or professional can be invaluable. Investment advisors and professionals generally fall into three groups: stockbrokers, professional money managers, and financial planners. In choosing a financial professional, consider his or her legal responsibilities in selecting securities for you, how the individual or firm is compensated for its services, and whether an individual’s qualifications and experience are well suited to your needs. Ask friends, family and coworkers if they can recommend professionals whom they have used and worked with well. Ask for references, and check with local and federal regulatory agencies to find out whether there have been any customer complaints or disciplinary actions against an individual in the past. Consider how well an individual listens to your goals, objectives and concerns.


Stockbrokers work for brokerage houses, generally on commission. Though any investment recommendations they make are required by the SEC to be suitable for you as an investor, a broker may or may not be able to put together an overall financial plan for you, depending on his or her training and accreditation. Verify that an individual broker has the requisite skill and knowledge to assist you in your investment decisions.

Professional money managers

Professional money managers were once available only for extremely high net-worth individuals. But that has changed a bit now that competition for investment dollars has grown so much, due in part to the proliferation of discount brokers on the Internet. Now, many professional money managers have considerably lowered their initial investment requirements in an effort to attract more clients.

A professional money manager designs an investment portfolio tailored to the client’s investment objectives. Fees are usually based on a sliding scale as a percentage of assets under management–the more in the account, the lower the percentage you are charged. Management fees and expenses can vary widely among managers, and all fees and charges should be fully disclosed.

Financial Advisor

A financial advisor can help you set financial goals and develop and help implement an appropriate financial plan that manages all aspects of your financial picture, including investing, retirement planning, estate planning, and protection planning. Ideally, a financial planner looks at your finances as an interrelated whole. Contact us today for your complimentary consultation.

Disclosure:The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Sterling Group United recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.

Robo Advisors: Are They The Smart Choice?  

Robo Advisors: Are They The Smart Choice?  

With technology comes many advantages. For most people, getting something done in an automated fashion sounds good because it minimizes the amount of time you have to commit to the task. Robo advisors are one of the tools available to you that may be able to help. While these are tools, they do not replace the need for skilled and experienced advisors who can provide more insightful and effective solutions for you.

What Are the Benefits of Robo Advisors?

Robo advisors are a type of digital investment tool. They let you input some basic information. Then, they watch trends in the market and adjust your strategies to match. There are various forms, and some offer more features than others. Their ultimate benefit is that they automate the process for you.

If you are an entry-level investor and want to do your own investing, robo advisors can be one way for you to do this. They are very easy to use, and they do have lower fees. You do not have to have a significant amount of money to invest to use them either. They are a starting point for most people, though. They offer some benefits, including:

  • Low-cost portfolio access
  • Tax-efficient
  • Easy to use

What Are the Drawbacks of Robo Advisors?

While they are an easy first step, robo advisors cannot do it all for you. First, they are not financial planners. Most of these systems are basic in terms of what they can do for you. You are not working with a professional who can answer questions and give you advice. At the same time, they tend to have limitations for those who want to invest a larger amount – especially when you want higher results. They do not guarantee results.

Should you use them? It’s a good idea to turn to a financial advisor for more guidance. Use robo advisors for the investments you want to control on your own, perhaps if you like dabbling in the market yourself.

Are You Looking for More Support in Investment Decision-Making?

It’s not uncommon for robo advisors to be an attractive option for those who just don’t have time to manage their investments. Our team at Sterling Financial can help you. Turn to us to learn more about what you can expect and the solutions available to you.

How to Choose a Financial Advisement Firm  

How to Choose a Financial Advisement Firm  

Investing in a financial adviser is perhaps the best step for most Americans to take. Without the experience and knowledge these pros have, you’ll have to make key investment decisions on your own. That’s not easy to do with the myriad of investment options today. What should you look for then in a financial advisement firm?

#1: Ensure They Are Certified

It seems like the simple first step. Yet, with both online and in-person brokers available, it’s not easy to navigate the options. Be sure the individuals are certified financial planners or financial advisers. You need to know they have the skill to work with you.

#2: Consider the Payment Schedule

Fee-based and commission-based advisers are available. Both can be good options depending on the goals they offer. You want an advisor that’s invested in your success, not just in selling you various products. It’s also important to understand the fee structure in every situation. What can you expect to pay, in fees, for using the service?

#3: Navigate the Services You Need

Do you have a large amount of money to invest? Are you just starting out? Consider how much support you need from the company.

  • Comprehensive financial planning is an opportunity to create a one-time path towards building wealth with considerations such as insurance, investment strategies, and retirement.
  • You may, on the other hand, need an hourly consultation about investment strategies.
  • Asset management can be another valuable professional service – one that sticks with you long term.

Get to Know the Firm and the Individual

As you consider your options in financial advisement firms, there are a few things to keep in mind:

  • What credentials does your individual adviser have? Will this person be working directly with you?
  • Is the professional ethical? You can verify any legal actions against them by doing a bit of a search at the SEC’s Investment Adviser Search site.
  • What type of experience does he or she have working with people in your situation?

It also helps to really like the person you are going to work with, or, at the very least, trust in their abilities.  

Finding a Professional You Trust Starts Here

At Sterling Financial, we provide you with the tools and resources you need to make the best financial decisions. Connect with our financial advisement firm today for a consultation.

Why Switch to a Local Investment Firm?  

Why Switch to a Local Investment Firm?  

If you’re currently working with an online financial advisor or investment firm, it may be time to consider making the switch to a local group. While online investment firms can provide you with the basic advisory services you need (and often at a reasonable price), they simply can’t compare to the personalized level of service that a local investment firm can offer.

By exploring just a few key benefits of switching to a local investment firm, you can better understand all you may be missing out on with your current service.

Enjoy More Direct Communication

With an online investment advisor, the lines of communication aren’t always very open. Yes, you may be able to reach your advisor via e-mail, phone, or text message—but there’s something to be said for having the ability to actually sit down at a scheduled meeting to speak with your investment team in-person. Face-to-face communication allows for easier conveyance of messages that you simply can’t achieve via e-mail or even over the phone.

Receive a More Personalized Approach

When you’re able to meet with and get to know your investment advisors in-person, they can also get to know you and your financial goals better. As a result, you can receive a more personalized approach to achieving your financial goals and making the right investment decisions for your current situation in life. And as life changes, your local investment advisors will be right there with you to make new recommendations and keep your finances on-track.

Explore Local Investment Opportunities

Local investments can be some of the best investments you’ll ever make—but if you’re working with an online financial advisor who is located 500 miles away, you may never find out about the best opportunities that are in your very own community. A local investment firm will be able to help you make wise investments that also contribute to the growth of your local neighborhood; those are investments you can really feel good about.

Online investment firms have their merits, but nothing can compare to the level of service you receive when you work directly with a local investment advisor. Contact Sterling Financial today to find out more about how we can help you with a personalized level of service and care.

Working with an Arizona Registered Investment Advisor  

Working with an Arizona Registered Investment Advisor  

There are many tools and resources available today to help individuals make buying decisions for investments or to plan complex retirement savings plans. Yet, there is no better help than hiring an Arizona registered investment advisor, or RIA, for the job. If you’re investing and counting on those returns, it’s best to have an experienced, successful professional by your side.

What Can an Arizona Registered Investment Advisor Do for You?

This professional provides advice and can make recommendations to you for your investment decisions. They can also create and issue reports for or provide analysis on the securities you plan to invest in. Unlike other parties, an RIA is able to tell you what you can expect if you make any specific decision. It’s important to recognize that all investments carry risk. Yet, when you are using an RIA, the information and insight they offer comes from experience, training, and professional guidance.

Working with a registered investment advisor in Arizona means you are working with a professional with experience and one that has more advanced training. A broker-dealer, on the other hand, is slightly different. The biggest difference in these professionals is that they are regulated a bit differently. If you use just a broker-dealer, that party does not carry the same requirement as an investment advisor does. That requirement is that they have legally required to put your interests ahead of their own.

Should You Get Started?

If you are planning to make sizable investments or you want to be more hands-off in the investment plans you have, working with an RIA is the best route to go. Even if you are just starting off on the path of investing, it helps to know you have a trusted professional who is working for your best interests available to you. The right professional matters, though. Learn more about any RIA before you hire them to manage your finances.

When You Need Trusted Help, Allow Our Team to Be There

Sterling Financial has the registered investment advisor you need. We provide comprehensive services to residents in all areas of Arizona. Contact us today to learn more about how our team can help support your goals.

Arizona Real Estate Investment Firm: How to Choose

There is a growing demand in the real estate investment area. And, as many people move into this area to build up their portfolio, it becomes increasingly important to have a real estate investment firm in Arizona you can depend on to lead your decisions and grow your bottom line. There are a few key things to look for in a company before you decide to choose them.

Top-Notch Agents

You need to know that the person you are working with is dedicated to your goal. In a real estate investment firm, it’s more than just hiring someone to help you with the transaction. It is about learning about your goals, mapping out a plan, and creating opportunities. The professional you work with needs to be able to provide you with access and guidance.

A Real Estate Investment Firm That Has a Proven Track Record

It is often said that a company with experience is worth investing in. Yet, a company with experience excelling in this highly competitive industry is even more important. When you work with a team like this, that you can trust, you gain the benefit of having confidence in knowing your decisions are the best ones you can make.

Accessibility Matters 

The real estate investment firm in Arizona that’s right for you is one you can call and rely on whenever you need to. Having a team you can trust to answer the phone, give you guidance, and remain in connection with you on a routine basis is very important. Don’t hire someone you have trouble working with – remember, they are working for you.

Turn to a Real Estate Investment Industry Leader

When choosing a firm to put your money and time into, you don’t have room for errors or mistakes. That is why it helps to learn how much of a role the company plays in helping others in the industry to thrive. Find out how the company you choose is making a difference.

Obtain the Support You Need from Our Team at Sterling Financial

As a leader in the community and a dedicated Arizona real estate investment firm, put your trust in Sterling Financial. Contact us today to learn about the variety of options we can offer to help you build out your portfolio.