Handling Portfolio Moves in an Uncertain Stock Market

DALLAS, April 10, 2012 /PRNewswire/ -- Stock market volatility tends to unnerve many investors. Most recently, that volatility was underscored by the Dow Jones Industrial Average crossing the largely psychological 13,000 mark. Wild swings in a a major index such as the Dow – whether those wild swings are up or down – always create a flurry of speculation.

But according to William Riley, Chief Executive Officer and Chief Compliance Officer at Fort Worth-based Riley Wealth Management, the current stock market euphoria offers an ideal opportunity to assess when making a change in one's portfolio is warranted. "So often our impulse is to get out of the market when things are a bit rocky or to buy more stock just because the Dow is high," says Riley. "But getting out just because there is some volatility in the market or buying without a prudent assessment just because the market is high can often spell disaster for a portfolio."

Riley, believes there are few instances when a change in investment portfolio strategy are warranted. "Making a change in an investment portfolio should change two times: upon significant life changes and when the level of risk has been incorrectly assessed – independent of what the market is currently doing," says Riley.

PROFESSIONAL BALANCING ACT

According to Riley, portfolios often have been set up improperly thus resulting in an investor getting spooked when the market is volatile. "When people get spooked and want to get out of the market just because it is down, I worry that they, and perhaps their financial advisor, have inadequately assessed their risk tolerance," says Riley. "Every quarter, I sit with my clients to go through a disciplined rebalancing process to ensure their portfolio doesn't get overweighted because of market ups or downs." But Riley is quick to point out that clients should be aware of the consequences of the ways in which a portfolio is set up. While certain moves might offer great rewards, they could also result in great risks; investors must be prepared for both possible outcomes.

"Portfolios should always reflect where an investor is in his or her life," says Riley. "If you've recently gotten married or divorced, if you've lost a job, if you're nearing retirement or have received an inheritance or corporate stock options, you should be considering how to adapt your portfolio to these life changes."

If the investor has been working with a competent financial advisor and/or has developed a prudent investment plan, Riley suggests that investors trust the process by remaining connected to the reason they are investing and what the long-term goals are irrespective of the noise they might be hearing about the next big stock or stock sector or, on the other hand, that the markets are about to plunge.

"Fear is absolutely an important and reasonable emotion when thinking about investments – after all, this is your nest egg," says Riley. "But it's important to always remember that what we want to do is buy low and sell high. If your impulse is to get out of the market every time there is a dip or to buy stock when it is reaching new highs, it is unlikely you will ever achieve your long-term investment goals."

About William Riley and Riley Wealth Management, LLC

Riley Wealth Management, LLC is an independent advisory firm based in Fort Worth, TX. The firm takes, a collaborative approach and offers customized strategies that help clients transform their prosperity into their desired lifestyle for today and a strong legacy for the future.

A co-founder and shareholder, William Riley is a 33-year industry veteran, who observed many years ago that, over time, institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Riley works tirelessly to make the wealth management strategies used by the world's wealthiest families and largest institutions available to the firm's individual clients.

Prior to co-founding Riley Wealth Management, LLC, Riley held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. He founded Fort Worth branches for Raymond James and J.C. Bradford.

A Texas Christian University alumnus, Riley holds a Masters in Business Administration (MBA), and has earned the Chartered Financial Consultant (ChFC), Chartered Life Underwriter (CLU) and Wealth Management Specialist (WSM) designations.

For more information about Riley Wealth Management, LLC, visit www.rileywealth.com.

SOURCE Riley Wealth Management, LLC