New York, NY (PRWEB) July 23, 2013
ConservativeFinancials.com online financial advice magazine today released their support for U.K. investment research company Morningstar’s recent article about the how-to’s of building a successful and diversified portfolio. The Morningstar article is actually geared towards European readers, but ConservativeFinancials.com dug through the content to find which portions were applicable to American consumers and added some of their own insight to the recommendations.
On July 9th 2013, Morningstar, a U.K.-based company providing objective investment information on European funds, published an article titled “Building a Fund Portfolio.” ConservativeFinancials.com was struck by how similar many of the suggestions are for Americans and Europeans alike, and called American consumers to take heed of their advice. For example, Morningstar reported that one of the most difficult, but most crucial, part of the investing process is actually determining why one is investing, what they are investing for, and how much money is needed to reach the goal. The article goes on to state that one’s portfolio is shaped with the answers to these questions in mind, and tailored around one’s risk tolerance. Another important factor that Morningstar highlights is how much time one has to reach their goal. If the timeframe is 30+ years, it might be okay to invest in riskier markets. But if the goal is short-term, fiver years or so, taking on risk might not allow enough time to make up for any losses sustained along the way.
Tending to take a more conservative approach to investing, ConservativeFinancials.com advised consumers to listen to their gut when deciding how risky of a venture to take. ConservativeFinancials.com is quoted as saying, “Certain types of people enjoy investing money into risky markets because it’s sort of a game to them. But then you have your crowd of people who actually feel physically nauseous at the thought of losing a big chunk of money in a volatile market. I find that these are generally the same type of people who do not enjoy gambling or going to casinos, either. You have to be able to sleep at night with your financial choices, and as such we recommend paying close attention to what your gut is telling you. It’s okay to play by the old adage, ‘Slow and steady wins the race.’”
The above-mentioned Morningstar article also recommended having a core group of three to four funds that are proven performers for each goal which a consumer has set. Morningstar advises investing roughly 70-80% in assets into these core funds since these are the reliable, trusty investments that can be counted on to deliver year after year. The article is quoted as stating, “When looking for core funds, simple rules prevail. The more boring, the better; the goal is steady gains, not excitement. Look for funds with low fees, long-tenured managers, easily understandable strategies, moderate risk, and consistent performance.” The other portion of one’s investments, according to Morningstar, can be riskier and more aggressive, funds which they refer to as “stop-and-go” funds which can juice up the returns. These could be funds focusing on a single industry, emerging market, or shares bought for a company known to reward its shareholders generously for their stake in that company. ConservativeFinancials.com stated that all of these concepts can and should be applied when Americans are crafting their individual portfolios.
According to their website, Morningstar U.K. opened in 2000 in London with its website launch a year afterwards. Morningstar works in Asia, North America, Australia, and Europe to provide independent investment research.
ConservativeFinancials.com is an online finance column that offers advice and relevant information to consumers looking to build their portfolio or dip into some new investments. The magazine tends to err on the side of being conservative in investing, offering advice on more secure and traditional methods like savings bonds, bank CDs, treasury bills, and high dividend stocks.