During periods of market volatility, it is crucial to consider your other assets and approach your portfolio holistically, advises Lazetta Rainey Braxton, a certified financial planner and the co-founder and co-CEO of virtual advisory firm 2050 Wealth Partners.
Braxton, who is a member of CNBC’s Financial Advisor Council, emphasizes the need for investors to understand their risk tolerance based on their financial goals. Rather than solely focusing on the direction of the market, it is essential to assess the diversification of your portfolio.
Braxton advises individuals to approach their financial future from a holistic perspective, rather than solely focusing on investments. She emphasizes the importance of protecting oneself, one’s wealth, and one’s legacy.
‘Don’t get so wrapped up in the markets’
Braxton defines a broader portfolio as encompassing all of an individual’s assets, including investments, cash savings, real estate, and human capital. It is essential not to obsess over market fluctuations but instead prioritize safeguarding one’s assets.
When strategizing a financial plan, Braxton urges consideration of one’s home and human capital. Protecting assets with insurance, such as life insurance and policies for home, auto, and personal belongings, is crucial. Additionally, investing in skills development can help preserve one’s primary source of income, particularly during economic downturns.
Maintaining liquidity through cash reserves is also important to avoid being forced to sell investments at unfavorable times. Braxton advises balancing the risk by protecting liquidity, despite the potential impact of inflation on savings.
Overall, Braxton emphasizes the significance of a balanced and diversified portfolio of assets when considering one’s financial future.
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