In the first part of this series, I detailed my move from a financial advisor to an independent brokerage, focusing on the account setup and asset transfer. In this part, I detail the steps I followed to change my investment strategy.
DISCLAIMER: This isn’t advice. Don’t follow it.
Step 1: Current Strategy and Allocation
Having an advisor is a useful abstraction away from the details of your investments. You often don’t know where your money is - you just trust it’s in the right place. Before changing anything, I spent time to reassess my existing risk profile and strategy - and how this was reflected in my asset allocation.
I decided a new allocation was necessary. I was over diversified, some investments were pure speculation, and fees were too high.
Step 2: Deciding on A New Allocation
This is an ongoing process, and the objective was to create an allocation reflective of my financial goals and risk profile. This came through some valuable conversations with investment professionals, peers in my industry and others.
I won’t go into the details of my new allocation, but it is a combination of [mostly] equities and some cash to give me flexibility to buy more.
Step 3: Setting Up Asset Allocation
This was a two step process - selling the old stocks/bonds and using those proceeds, buying the same amount of the new.
I decided not to market time and made all my sell orders almost as soon as the transfer between brokerages was complete. The buy process is taking a little bit longer, primarily because of the recent activity in the market. I recently (wrote about) investing in bear markets as well.
This was a long and drawn out process - especially because it was my first time and I was extra cautious. I learned a lot along the way and am looking forward to taking greater control of my investments.