Properly Diversified

Published on Jan. 29, 2019

Properly Diversified

In the news:

After analyzing almost 10,000 financial advisor models with their proprietary risk management platform, BlackRock discovered that even after trimming U.S. Stocks in 2018, financial advisors were still overweight equities. BlackRock’s advice after the discovery was to “get properly diversified.” According to the latest Advisor Insights Guide by Blackrock’s Portfolio Solutions group, “Advisors have been consistently overweight U.S. equities (and U.S. Dollar), underweight U.S. Treasuries and shorter-duration in fixed income for many years.” It also found that “advisor portfolios weren’t well positioned” coming into 2019. We believe Blackrock’s free advice should be heeded.

While the last few months of volatility in the capital markets can be unsettling, such concerns should not come at the expense of preparing for a comfortable retirement. Making informed decisions on what retirement savings route is best for your clients should be addressed sooner rather than later to help reduce the impact of market dips in the long term.

Graph Advisors have trimmed US stocks

Our Thoughts:

According to a recent Nuveen survey, investors indicated that in the next six months they would like to discuss with their financial advisors a portfolio that can generate income while seeking to preserve capital. We feel we have a unique perspective when it comes to fixed income and the generation of income. At Roosevelt, we believe in not taking excessive risks to generate income today that may jeopardize the ability of the portfolio to provide income in the future. To produce high levels of income, many investors may be unwittingly assuming a variety of different types of risks. We take a different approach. The Current Income Portfolio (CIP) seeks to benefit investors who desire high and reliable levels of income from an investment grade portfolio. CIP seeks to provide a substantial income stream by maximizing annual cash flows while preserving capital.


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