Your Portfolio & Financial Plan

March 05, 2020

Marc Scudillo, Managing Director, and Steve Wang, Chief Investment Analyst, of EisnerAmper's Wealth Management and Corporate Benefits discuss the Quarter 1 Investment Committee Meeting. The final part in this series emphasizes the importance of actively managing risk within an individual’s financial plan in order to help clients achieve their financial goals with the least amount of portfolio risk.

This video was recorded on February 25, 2020. Update to follow. View the full video here.


Transcript

Marc Scudillo: To kind of summarize what our investment committee had stated yesterday is to make sure that as we're looking at the planning process, which is foremost most important for our clients because it helps us determine when they're going to be towards those, what we call the guardrails of success towards their goals, is when is it time to make some adjustments in their portfolio? When is it time to take some risk off the table? And we have a way to actually formulate that on a quantitative basis to be able to say, "Now we take some risk off the table, not because we're anticipating a downturn in the market, but because we want to take risk off the goals that you're trying to achieve," which is really the ideal scenario in a planning process.
Steve Wang: Correct.

Marc Scudillo: Any concluding thoughts?
Steve Wang: In terms of the market right now, we know that the market is nervous, investors are nervous, and because of the Coronavirus heading across the globe, but within our firm, within our team, we continue to watch that closely and to work with our institutional partners, firms like the JP Morgan or Goldman Sachs or some other investment banks. We want to make sure that we have fully assessed the potential of the risk on affecting our GDP as well as the GDP across the globe, to have a better understanding of what's the potential impact and we can take it from there.
Marc Scudillo: Sure. And we concluded yesterday that it's important not to take the concept of riding out a market. That's not what you want to do. You want to adjust accordingly to the market. And so when we were discussing, well, if the market does have a correction, which you have to remember, we're in our longest bull market in history, so that a correction is inevitably going to come at some point in time. That's just the reality of investing. And we were discussing, well, how do you take advantage of correction? We're prepping ourselves and our clients to be able to take advantage of a correction. One is we're taking risk off the table now for those clients that could achieve their goals. Two, we're saying, "Well we want to be able to re-balance the portfolio into that dip."

That's why the importance of still maintaining a fixed income piece or bond piece of the portfolio is still there, because that's our stability within the portfolio. Three is to make sure that if there's free cash set aside, that we're able to buy into those dips in the market along the way, and we have that set aside from our clients not only from a form of extra cash, but also from the yield that we're receiving, the dividends and interest that's coming in on a regular basis. Lastly, of course, we're going to want to make sure that we take advantage of any tax planning that we could do when there's a correction in the market as well.
Steve Wang: Correct. I can assure you that our managers are working very closely with each of our client's portfolio, and we take seriously about the tax laws harvesting, and right now is a good time.
Marc Scudillo:Good, good. Well, thank you, Steve. Thank you for listening, and we look forward to seeing you and speaking to you next quarter.
Marc Scudillo: Thank you.

About Marc Scudillo

Marc Scudillo provides financial planning, investment and wealth preservation protection services to both individuals and corporations.


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