In today’s world, the amount of information an individual has access to is endless. With that being said, it can be challenging to navigate the world of wealth management. With ever-changing market cycles and fluctuations, it’s important to understand your financial goals and how they will guide your portfolio.
How can you sift through all the noise to understand what is best for your financial goals and risk profile? Let’s discuss.
The Role of Emotions in Your Investment Decisions
Understanding the role that emotions play in crafting your wealth profile is one of the first steps in reaching your financial goals.
In an SEC-sponsored research paper, it’s reported that “investors tend to fall into predictable patterns of destructive behavior. In other words, they make the same mistakes repeatedly. Specifically, many investors damage their portfolios by under diversifying; trading frequently; following the herd; favoring the familiar (domestic stocks, company stock, and glamour stocks); selling winning positions and holding onto losing positions (disposition effect); and succumbing to optimism, short-term thinking, and overconfidence (self-attribution bias).”
Knowing this, how can you understand when you may be falling into these predictable, not so profitable, patterns?
It all begins with an understanding of your goals and your risk profile. These two items are the basis for building out a financial portfolio that performs for your needs.
Your Advisor’s Role in Achieving Your Financial Goals
Wealth advisors that thoroughly understand your goals and your risk profile can make a huge difference in navigating your wealth. At Centura, our advisors use the Liberated WealthⓇ Process to guide our client relationships. Our goal is to understand your wealth, identify inefficiencies, design new pathways, and liberate your wealth.
So, what does this process look like?
As we mentioned above, it all starts with understanding your risk profile and your financial goals. During this step of the process, Uncover, our team collects data, discusses your purpose and path, and discovers all that we need to know about your current wealth profile. This discovery is a crucial step in the process of understanding how our advisors can help you build sustainable wealth.
Following the Uncover step, our advisors Unlock the initial plans, scenarios, and strategies to move forward with your portfolio. From the information that is gathered in the Uncover step, our advisors identify your existing strategy and establish a baseline plan. In this stage, your advisor is looking at the “what if” scenarios associated with your portfolio and using them to guide potential new strategies.
The next step of the Liberated Wealth Process is to actually craft the plan—the Design phase. Your advisor will put together a multi-phase action plan, combined with a wealth scorecard to track your progress.
You have now reached the point of implementation. The Liberate step of the process is to implement the plan, coordinate necessary professionals, implement the portfolio, and report on the scorecard.
Lastly, you get to the Steward step of the process. This step is an ongoing effort of monitoring your plan, reviewing, and recalibrating as needed. The advisor you are working with will help steward you through all of the life events that come your way, whether that is retirement, having a child, starting a business, and the list goes on.
Our goal at Centura Wealth Advisory is to steward our clients toward achieving their financial goals. Want to learn more about why stewardship is at the core of everything we do for our clients? Read on to find out why stewardship is at the core of everything we do.