Chartered Portfolio Manager and Investment Management- Discussion Post 4

Chartered Portfolio Manager and Investment Management- Discussion Post 4

Read pages 28-34 in the Wealth Management Treatise (attached), then read these two Morningstar articles on portfolio rebalancing:

http://www.marketwatch.com/story/how-to-rebalance-your-retirement-portfolio-2013-11-02
http://www.marketwatch.com/story/the-right-way-to-rebalance-your-portfolio-2014-02-18

Instructions: Understand that there is no single theory or rule on when to rebalance a client portfolio. This week, write your post on how often YOU think a portfolio should be rebalanced, and why. What sort of considerations need to be made when rebalancing? Make sure to back up your opinion, and please cite sources. In your post, consider counter-arguments.

To complete the assignment: Read pages 28-34 in the Wealth Management Treatise (attached) then read these two Morningstar articles on portfolio rebalancing. http://www.marketwatch.com/story/how-to-rebalance-your-retirement-portfolio-2013-11-02
http://www.marketwatch.com/story/the-right-way-to-rebalance-your-portfolio-2014-02-18

Instructions: Understand that there is no single theory or rule on when to rebalance a client portfolio. This week, write your post on how often YOU think a portfolio should be rebalanced, and why. What sort of considerations need to be made when rebalancing? Make sure to back up your opinion, and please cite sources. In your post, consider counter-arguments.

Private Wealth Management Guide – George Mentz, JD, MBA
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Wealth Management
and Financial Planning Treatise
A Treatise & Reference Guide for Wealth Managers and Wealth Management Executives
Fundamentals of Wealth Management for The Wealthy and International: Financial Analysts, Portfolio Managers, Asset Managers, Wealth & Trust Management Professionals
Prof. George S. Mentz, JD, MBA, CWM ®
Counselor of Law USA – International Lawyer
This book is intended to be a research tool for students of finance worldwide. The book has a US Centric Focus on economics, banking, investments and taxation. This book will help you find information that you need and to learn more about the wealth management and financial planning world.
Private Wealth Management Guide – George Mentz, JD, MBA
2
Wealth Management
and Financial Planning
ISBN 978-1-105-49205-1
Printed in the United States of America
All rights reserved 2007-2012. No part of this book may be reproduced by any mechanical, photographic, or electronic process, or in the form of any audio recording or version. Nor, May it be stored in any retrieval system, transmitted, or otherwise by copied, cloned or reproduced for private or public use other than fair use as brief quotations embodied in the articles an reviews without prior written permission of the publisher. No responsibility is assumed for your actions in relation to the teachings of this book comments or insights. The intent of the author is only to offer information of a general nature to help you in your quest for financial education. Please consult a licensed professional before making any important decision. All Rights Reserved.
Private Wealth Management Guide – George Mentz, JD, MBA

Saving and Investing
Define Your Goals
To end up where you want to be, you‘ll need a roadmap, a financial plan. To get started on your plan, you‘ll need to ask yourself what are the things you want to save and invest for. Here are some possibilities:
? A home
? A car
? An education
? A comfortable retirement
? Your children
? Medical or other emergencies
? Periods of unemployment
? Caring for parents
Make your own list and then think about which goals are the most important to you. List your most important goals first.
What do you want to save or invest for?
By when?
1.
2.
3.
4.
5.
Decide how many years you have to meet each specific goal, because when you save or invest you‘ll need to find a savings or investment option that fits your time frame for meeting each goal.
Private Wealth Management Guide – George Mentz, JD, MBA
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Making a Financial Plan – Wealth Management and Financial Planning
Figuring Out Your Finances
Sit down and take an honest look at your entire financial situation. You can never take a journey without knowing where you‘re starting from, and a journey to financial security is no different.
You‘ll need to figure out on paper your current situation— what you own and what you owe. You‘ll be creating a ?net worth statement.? On one side of the page, list what you own. These are your ?assets.? And on the other side list what you owe other people, your ?liabilities? or debts.
Your Net Worth Statement
Assets
Current Value
Liabilities
A
Subtract your liabilities from your assets. If your assets are larger than your liabilities, you have a ?positive? net worth. If your liabilities are greater than your assets, you have a ?negative? net worth. You‘ll want to update your ?net worth statement? every year to keep track of how you are doing. Don‘t be discouraged if you have a negative net worth. If you follow a plan to get into a positive position, you‘re doing the right thing.
Private Wealth Management Guide – George Mentz, JD, MBA
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KNOW YOUR INCOME AND EXPENSES
The next step is to keep track of your income and your expenses for every month. Write down what you and others in your family earn, and then your monthly expenses. Include a category for savings and investing. What are you paying yourself every month? Many people get into the habit of saving and investing by following this advice: always pay yourself or your family first. Many people find it easier to pay themselves first if they allow their bank to automatically remove money from their paycheck and deposit it into a savings or investment account. Likely even better, for tax purposes, is to participate in an employer sponsored retirement plan such as a 401(k), 403(b), or 457(b). These plans will typically not only automatically deduct money from your paycheck, but will immediately reduce the taxes you are paying. Additionally, in many plans the employer matches some or all of your contribution. When your employer does that, it‘s offering ?free money.? Any time you have automatic deductions made from your paycheck or bank account, you‘ll increase the chances of being able to stick to your plan and to realize your goals.
?But I Spend Everything I Make.?
If you are spending all your income, and never have money to save or invest, you‘ll need to look for ways to cut back on your expenses. When you watch where you spend your money, you will be surprised how small everyday expenses that you can do without add up over a year.
Monthly Income and Expenses

Private Wealth Management Guide – George Mentz, JD, MBA
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Small Savings Add Up to Big Money
How much does a cup of coffee cost you?
Would you believe $465.83.5? Or more?