INVESTMENT STRATEGIES & WHEN TO CHANGE THEM

If you’re interested in seeing evolution at work before your very eyes, pull out your cell phone. Most likely it’s not the same phone you had a couple of years ago. It probably has more features, streams video faster, and basically functions as your assistant. Source: NLG


But let’s say that you stopped updating your phone in 2005. Of course you’d have phone service (which you’d need in order to call someone for directions since you wouldn’t have any GPS on your phone). But you wouldn’t have a touchscreen. You wouldn’t have any apps either, so forget about making reservations on the fly, using your phone to update your status or tracking your fitness goals.


Basically, your cell phone would still work; it just wouldn’t work to its full potential.

So what does this have to do with investment strategy?

While investment strategies don’t have the obvious visual changes that cell phones do, they also experience significant updates. For example, over the past few decades mutual funds have been widely considered one of the easiest ways for average investors to participate in the market. The introduction of Exchange Traded Funds (ETFs) has created a new opportunity to invest in diversified portfolios that may be appropriate for some investors.


Further, while mutual funds and ETFs are still important investment options, investment strategy has continued to evolve, with investors focusing not just on the question of where to invest but how to invest. Asset allocation models help provide a framework to match an investor’s risk tolerance and time frame, and a basis for rebalancing their portfolio. Investors are also paying more attention to income strategies these days, with an eye towards the future when they will need to replace their earned income in retirement. This shift reveals an investor who is thinking more strategically and less reactively. This type of investing across asset classes and market sectors may also help enhance diversification.


Today, investment strategy is continuing to evolve. Not only are more investment options available to investors, but today’s advisors are able to bring money managers to the average investor that previously were only available to the very wealthy.

So while you look ahead to your next cell phone, consider also taking a look at your investment strategy and make sure that it’s helping you meet your financial goals as effectively as it can.


Lou Martinez is a Registered Representative of Equity Services, Inc., Member FINRA/SIPC. Equity Services, Inc. is a registered broker/dealer affiliate of National Life Insurance Company, Montpelier, Vermont. Securities can be offered solely by representatives registered to offer such products through a broker/dealer. Financial planning and investment advisory services can be offered solely through investment adviser representatives of a registered investment adviser.

Investing involves risk, including the potential for loss of principal. Past performance does not guarantee future performance.


Asset Allocation cannot eliminate the risk of fluctuating prices or uncertain returns. Diversification does not assure a profit or guarantee against loss. ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs’ net asset value.

Mutual Funds and Exchange Traded Funds (ETFs) are sold by prospectus. For more complete information, please request a prospectus from your registered representative. Please read it and consider carefully a Fund’s objectives, risks, charges and expenses before you invest or send money. The prospectus contains this and other information about the investment company.


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