Volatility is part and parcel of investing, as any experienced investor knows. A certain degree of unpredictability will always be inevitable.
That said, there are definitely ways that you can manage and reduce your risk so you can better protect your investment portfolio.
Village Media Content Studio spoke with Steven Rowley, CFA at Moyle Rowley Wealth Management, Wellington-Altus Private Wealth, about how reducing volatility, especially in equity markets, can offer substantial benefits for investors. He shared tips on how to avoid significant swings in your portfolio’s value and explained why managing and reducing volatility is essential for long-term financial success.
“Volatility is inherent in the investment world,” says Rowley. “Through our multi-decades of experience in building portfolios, we have been able to position clients where we can minimize the steps backwards so they can grow their wealth.”
The approach is not about avoiding risk entirely, but rather focusing on reducing volatility in a portfolio, and managing it in a way that aligns with your financial goals and risk tolerance.
Nor is it about trying to beat the market. “This is about taking on as little risk as possible to achieve your desired returns and meet your goals,” he explains.
Creating a lower-volatility portfolio
When you focus on strategies that reduce volatility, you can better preserve your capital as an investor. You’re also able to achieve more consistent returns and enjoy the long-term benefits of a well-managed investment portfolio. A lower-volatility portfolio has the potential to both enhance financial outcomes and provide peace of mind.
One of the strategies the wealth management firm uses to achieve this is to incorporate the principles of pension-style management. “After all, your retirement savings are your own personalized pension plan,” says Rowley. “Those funds need to be there to help fund retirement. We build personalized pension plans for our clients.”
Deciding on a course of action
If you have been feeling uneasy due to recent market fluctuations and have concerns about the level of volatility in your portfolio, this is a good time to take action. Your investment strategy should always align with your financial goals and tolerance for risk.
“If you’re experiencing more risk than you’re comfortable with, we’re here to help you reassess your portfolio and make the necessary adjustments to create a more stable, predictable investment experience. Our team of advisors is ready to work with you to design a strategy that reduces volatility while keeping you on track to meet your financial objectives,” says Rowley.
Investors are encouraged to reach out to schedule a portfolio review.
Taking the long view
“Keep in mind that volatility often brings opportunity,” adds Rowley. “The key is separating fact from emotion. Experience teaches you to avoid getting distracted by the noise in the media; that often has little direct impact on the companies we invest in.”
Working together with your advisor, you can ensure that your investments are positioned for long-term success, even in uncertain markets.
Says Rowley, “Let’s work together to build a portfolio you can feel confident about, no matter what the market brings.”
Wellington-Altus Financial Inc. was founded in April 2017 to revolutionize wealth management in Canada. One of Canada’s Best Managed Companies, Wellington-Altus identifies with successful, entrepreneurial advisors and portfolio managers and their high-net-worth clients.
The Moyle Rowley Wealth Management Group will soon be expanding, bringing their financial planning and investment management expertise to Barrie. The growth is in line with their desire to effectively service their clients both in the GTA and Simcoe area.
To build your own customized wealth plan and portfolio, or to reassess a current one, visit the Moyle Rowley Wealth Management Group of Wellington-Altus Private Wealth. You can also follow them on Facebook.
Steve Rowley is a Senior Wealth Advisor at Wellington-Altus Private Wealth (WAPW). The opinions expressed are not necessarily those of Wellington-Altus and do not constitute a recommendation or solicitation to buy or sell securities of any kind.