Scott Doré — one of the most highly regarded millennials in the wealth management field — told Business Insider that despite some short-term concerns about the stock market, he’s willing to stake his entire 401(k) on equities.
He also told Business Insider about the demographic trends he’s targeting to connect his clients to long-term growth in the real estate market.
Doré is a partner at Evoke Wealth, a new firm in California that manages $5 billion in assets.
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Sometimes a longer-term perspective makes risks look very different than they might first appear.
Scott Doré of Evoke Wealth — a $5 billion firm based in Los Angeles — told Business Insider how that applies to his own retirement plans as well as his work on behalf of clients. Doré was recently named one of the best millennial wealth managers by Forbes, and in an exclusive interview, he revealed an aggressive stance that’s still diversified.
In an exclusive interview, he broke down his approach to three major asset classes:
The bull market is more than a decade old and US stocks are near all-time highs again, marking an almost complete recovery from a swoon an August swoon caused by nervousness around the US-China trade war.
Doré says he’s concerned that they’re vulnerable and valuations are high right now.
“I am proceeding with caution with regard to public equities,” he said.
But that short term concern isn’t stopping him from taking an aggressive stance on stocks over the longer run, with an eye toward his own retirement.
“My 401(k) is 100% equities, which is quite risky, but I have at least 20 years if not much, much longer for those assets to grow,” he said. “I’m 39 and I can’t touch any retirement assets until I’m 59 and 1/2 years old, so that’s 20 years I have to weather any market turbulence.”
Doré says he’s keeping his risk profile balanced in other ways, as he has higher concentrations of fixed-income investments and cash in taxable, non-401(k) accounts. That provides diversification and stability while also minimizing the taxes he owes relative to the tax-advantaged 401(k).
Interest rates around the world are heading lower just a few months after the market appeared to be in a rising-rate environment. So Doré argues that the right move today is minimizing the risk of getting caught off-guard.
“I recommend that clients keep duration fairly short on fixed income portfolios,” he said. “Having a longer duration portfolio increases the amount of interest rate risk.”
He’s also discouraging clients from considering lower-quality, higher-yielding bonds as they hunt greater income. He said he believes the bond part of a portfolio should be the safest, not the highest-yielding.
“Taking risk with the conservative part of the portfolio in my mind doesn’t make a lot of sense,” he said.
With returns in stocks looking dicey for now and fixed income offering limited yield, Doré says alternatives like private equity and real estate are critical ways to diversify. …read more
Source:: Businessinsider – Finance