Preserving Your Portfolio - Page 5 of 8 - Black Enterprise

Page: 1 2 3 4 5 6 7 8

Black Enterprise Magazine January-March 2019 Issue

Page: 1 2 3 4 5 6 7 8

is—if it goes down 25%, 30%, or whatever they set as their personal threshold—I think that would be one trigger [to get out]. If they lose confidence in the manager or the fund or the market altogether, they can use that to execute their sell strategy.

CRAIG: It’s important that investors know what they are getting. Investors shouldn’t go out and buy an aggressive growth fund and think that if it doesn’t return 30-plus percent returns because growth goes out of favor, that somehow that manager is no longer appropriate for that particular allocation. I think the most important decision is, How much are you going to allocate to growth, how much are you going to allocate to value, small cap, international, fixed income? Generally speaking, the allocation is the most important decision, and you need to feel comfortable that the fund is following the guidelines that are appropriate for what you are trying to accomplish. In terms of fees, there are enough alternative funds to choose from, so that you don’t have to pay a lot for a mutual fund to get good performance.

B.E.: Any last words of advice for investors?

DIAMOND: If they have an allocation now that is very high in bonds, investors should take it down and increase equities. They should also consider being willing to take a certain percentage of their money to use as education and invest it in some of the stocks that my colleagues have mentioned, in an attempt to learn.

BATTS: In wrapping up, I would emphasize discipline, as it applies to their lives, in terms of their budgeting, a certain amount [of money] that they are going to invest. There are many vehicles out there where you can be very passive [about investing] or you can be as involved as you want to be. But it’s also important to take a longer-term approach and to understand that there is some volatility in the market. There is some downside risk, but over a longer period of time, with patience and discipline, they will be rewarded for their efforts.

CRAIG: Don’t allow the corporate malfeasance and the mutual fund scandals that are in the headlines today to keep you from investing. Obviously, you have to be more aware of where you invest, but there is a tremendous opportunity over the next couple of years. Over the longer term, I think investing in the financial markets is a must as you plan for your retirement and your kids’ education. The biggest decision that you have to make is the allocations to the various asset classes, and don’t be afraid to seek professional advice when you make those decisions.

COLEMAN: If you are trying to grow your money at a rate above 10%, then the stock market is the place to be. Time is your best ally. If you can just own a great idea for a decade, you will never be deluded again. Just buy a really great company and keep it for a decade, and you

Page: 1 2 3 4 5 6 7 8

Join the Conversation