How to Know You’ll Always Own a Winning Asset Class

by brendon on March 30, 2012

Great investment advice for Kansas City and Overland Park investors means making sure you own ALL asset classes.   Now, more than ever, firms and salespeople selling products that pay commissions are promoting things like HIGH YIELD BONDS.  (These are typically “JUNK BONDS” and will impact the volatility of your total investment portfolio like US Large Cap Stocks.)  Don’t buy these.

Instead, own a structured asset-class portfolio like Wealth Renovators, LLC clients own.   These are specifically designed to capture rates of return from over 15 individual asset classes.

You can’t predict which class will create the highest returns.  MANY, MANY investors, possibly yourself are CHASING RETURNS.   This means you, OR YOUR ADVISER (likely a salesperson selling commission products) are altering the mix of your portfolio based on “winning asset-class” returns from the previous year.   This video shows what happened to those investors that moved out of 3 asset-classes and CHASED RETURNS into another.  Don’t do this either.  It’s bad behavior because it negatively impacts your investment returns.

Contact me to analyze your holdings so you know exactly what your expected rate of return is, what asset-classes you’re invested into and how to improve returns and lower volatility.

{ 2 comments… read them below or add one }

David P. Crandall April 2, 2012 at 10:09 am

Great advice, Brendon. Past performance is no guarantee of future returns. I’m amazed that this article was even published in the WSJ. With the benefit of 20/20 hindsight, and the prerogative to select any benchmark and time period for comparison, nearly ANY investment could be made to look good.

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brendon April 2, 2012 at 10:21 am

You’re so right! Any investment can be made to look good if you pick the right time period.

REITs are another good example “chasing hot asset categories”. The Dow Jones US Select REIT Index had returns of 28.3% and 28.1% for 2009 and 2010, respectively. I’ve had many conversations since then about why NOT to load up in this asset-class. First because it’s “chasing returns”. Second, because returns from the US Small Value category mirror this category (with better returns). Third, non publicly traded REITs expose the client to liquidity risk–meaning if the client needs their money, there’s a lot of small print to make sure they’ve read ahead of time.

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