A Diverse Financial World – Choose your Data Wisely
The finance world is not what it was 20 years ago. In truth, the world of finance is not what is was even 5 years ago. The ability to synthesize the latest trends and patterns and act swiftly on this information is paramount. With increased change comes both greater opportunity for gain as well as increased exposure to unknown segments of the market. Information transfer is near instantaneous and wealth can be made or lost more quickly in an era of rapid decisions and swift expansion.
This is why focused and thoughtful data analysis is more important than ever. And it is essential that financial data is applied to individual circumstances. There is a near infinite amount of financial data and it requires experience to filter the information that is appropriate to your financial needs and goals.
A Volatile Financial Environment
There is much to be optimistic about in 2018 and beyond. The most recent and authoritative economic data has shown an improvement on all key metrics, which point to an increase in the strength of the US economy, though this strengthening is not limited to the USA alone. 2017 was an excellent year for stock investors, with the S&P 500 delivering a 21.7% return factoring in dividend reinvestment. These figures are based on stocks bought at the open on January 3rd 2017 and sold at the close on December 29th 2017. This was also the first time in history that every month showed a positive return.
Additionally, Central Bank policy has certainly curtailed a lot of potential risk in the financial sphere. In 2017 the Federal Reserve raised interest rates three times, and the economic environment is likely to accommodate this trend once again in 2018.
But this environment is not a guarantee that 2018 will bring stock market success. While 2017 was not especially volatile in terms of the stock market, seasoned investors were aware that a year of low volatility is most often followed by a year of high volatility. And this is what is currently happening, with 400 point swings becoming normal. 2018 is set to be the most volatile year since 2008.
The current environment also carries significant geopolitical risk which could affect the market in multiple ways, contributing to a market economy that is already incredibly volatile. The theme of 2018 is to be optimistically cautious in terms of returns but to always keep risk and volatility in mind. As always, manage risk accordingly.
With a personalized investment strategy as opposed to a generic product, volatility can be your friend as opposed to your enemy. With diverse options available to clients, there are innovative ways to take advantage of volatility while mitigating exposure to risk. Volatile years are the ones that carry the most risk for investors, and it is critical that investment options are chosen wisely.
Now, more than ever, a personalized financial strategy can help clients navigate this volatile economic environment. To achieve your financial goals, it may no longer be advisable to passively manage your investment portfolio to achieve your financial goals, regardless of your net worth.
HCR Wealth Advisors, an SEC-registered investment advisory firm based in Los Angeles, offers individualized financial advice and strategies to meet a client’s financial goals and expectations, whatever they may be. The firm aims to foster, above all else, an active partnership with each of its clients to understand exactly what each person needs. Only in a collaborative two-way relationship can a financial plan be tailored for each client. These solutions can help investors to make the most of current, and future, economic conditions.
About HCR Wealth Advisors
HCR Wealth Advisors is a registered investment advisory (RIA) firm that collaborates with clients on investment strategy. Clients can gain access to a variety of specialized investment opportunities that carry different risk/return profiles. The firm aims for an open and transparent relationship where clients are fully informed of all investment options, with a evaluation of the advantages and disadvantages of portfolio allocation decisions for each client.
HCR Wealth Advisors places its clients’ interests first, with a focus on empowering investors through education. As stated above, focused and thoughtful data analysis is critical in an age of seemingly infinite digital information.
Privacy and trust are the cornerstones of the business and HCR Wealth Advisors strives to serve its clients for multiple generations. Many of HCR’s clients have been with them for over 10 years. The firm seeks to financially empower its clients, advise, and collaborate, not simply to sell and collect a fee.
Sources: Stockcharts.com; BTIG research; Raymond James; Briefing.com; IBD; Barron’s
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