Find your balance––Stone Wealth Management

Find Your Balance

By Stone Wealth Management, Texoma LIVING WELL Magazine

Riding a bicycle is about getting your balance and keeping it until you reach your destination. Likewise, investing requires finding and periodically adjusting the balance of assets in your portfolio to help keep your investment plan on track.

According to David G. Stone, AAMS®, Senior Vice President – Investment Officer for Stone Wealth Management Group of Wells Fargo Advisors, LLC, it’s important to understand the relationship between risk and reward, which tend to go hand-in hand. “As return potential increases, so, usually, does the risk,” says Stone. “While U.S. stocks had a great year in 2013, they can be a relatively risky investment as was demonstrated in 2008 and early 2009. Bonds, on the other hand, tend to be less volatile, but their correspondingly lower return potential is often insufficient to significantly help investors reach their financial goals.”

Finding the appropriate asset allocation is important, and it is different for everyone, depending on goals, available resources, and stage of life. Like scheduled maintenance on your car, reviewing and rebalancing your portfolio periodically is the best way to help ensure proper allocation. Talking with Stone Wealth Management Group can help determine if your portfolio’s asset allocation and risk levels still match your long-term objectives. “The hard part of investing isn’t coming up with a plan, it’s sticking to it,” said Juston Dobbs, MBA, CFP® Vice President – Investments for Stone Wealth Management Group of Wells Fargo Advisors, LLC. “The idea of rebalancing goes against investor emotions. Many investors prefer to eliminate temporary laggards and double down on the winners. We refer to rebalancing as ‘selling into strength and buying into weakness’.”

“As we move through the financial cycles of our lives, opportunities present themselves to adjust our investment objectives and risk profile,” Stone said. “The asset allocation of our investments at age 65 is likely to be quite different than at age 35. This natural “rebalancing” is a potentially important part of your investment plan.”

In some cases, rebalancing can increase the return potential and help lower the risk in a portfolio when compared to one that is not systematically rebalanced. Strategic rebalancing may also help reduce the market’s volatility effects by returning the asset allocation to target levels on a regular schedule, which may help you to weather and take advantage of the market’s ups and downs.

Investors who have not rebalanced in several years may find that a strategy of dollar cost averaging into a diversified portfolio, purchasing a fixed amount periodically over time, can help manage risk and contribute to goals.

“Every type (asset class) of investment has a historical rate of return and a historical level of (downside) risk. From time to time, each type of investment either outperforms or underperforms its historical average. Therefore, by rebalancing your portfolio on a regular basis (i.e. annually), it forces you to non-emotionally take advantage of the short-term market fluctuations and ‘buy low and sell high.’ This potentially adds tremendous value to the management of your assets.”

Consider the benefits of having an experienced team of financial advisors working for you. Call Stone Wealth Management Group of Wells Fargo Advisors, LLC, at 903-893-6682. Or visit their website at

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Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. Diversification does not guarantee profit or protect against loss in declining markets. The opinions expressed in this report are those of David Stone and Juston Dobbs and are not necessarily those of Wells Fargo Advisors or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.

An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations.

Past performance is not a guarantee of future results.

All fixed income investments may be worth less than original cost upon redemption or maturity.

A periodic investment plan such as dollar cost averaging does not assure a profit or protect against a loss in declining markets. Since such a strategy involves continuous investment, the investor should consider his or her ability to continue purchases through periods of low price levels.