3 Actions to Build a Profitable Portfolio

11/17/2022

Action #1: Run a portfolio checkup

Now can be a good time to check the health of your portfolio to ensure it is well-diversified and aligned with your investment objectives. Here are three approaches different investors may want to consider:

• Cautious Investors: Consider a conservative portfolio that includes core bond strategies that seek to offer capital preservation and dividend- paying companies with solid balance sheets that can sustain or quickly restart dividend payments.

Balanced Investors: It may be time to revisit stock and bond allocations. Look for flexible equity mandates that can pursue stable growth opportunities in markets around the world.

Opportunistic Investors: Seek opportunities to invest in durable growth trends, like e-commerce, digital payments and select innovative health care companies from around the globe.

Action #2: Upgrade your bond portfolio

Even if you believe equities are set for a strong recovery, fixed income should remain an important part of your portfolio. Recoveries are often choppy, and core bonds can provide an essential measure of stability and capital preservation. With interest rates expected to remain low, it's not too late to get your core right.

You don't necessarily need to change your portfolio weightings to bonds during periods of volatility, but you should review whether your fixed income investments contain enough high-quality core bonds that can provide adequate diversification from equities.

While everyone expects the global economy to see the end of this turmoil in time, the path to recovery is still unknown. A balanced portfolio remains vital.

Action #3: Expand your horizons beyond borders

In uncertain times, it can be natural to narrow your perspective and only focus where you're most comfortable. But if you can broaden your horizons beyond borders, you may be able to benefit from the growth potential of great companies in a variety of industries and markets.

And even if you think U.S. markets have bottomed and are poised for a strong recovery, don't assume all the best stocks will come from America. Over the last prolonged bull market, the S&P 500 Index soundly outpaced its international peers, but three quarters of the top-returning stocks each year were based on foreign soil.

If you are seeking additional global or international exposure you may want to consider funds with flexible mandates which allow their managers to choose from the best companies, no matter where they are located. 

Expat Wealth At Work is an independent investment advisor who believes our expat clients' aspirations come first. Our practice is built on a foundational desire to make a difference in the lives of those we work with. Contact us today for a no obligation consultation: hello@expatwealthatwork.com