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Work The Core

Peter Katevatis - Mar 27, 2015
Get down on the floor in pushup position on your toes and forearms.  Hold the plank position for 60 seconds, repeat. The original core workout was the dreaded sit-up, but now most personal trainers will agree the plank is the single best exercise

Get down on the floor in pushup position on your toes and forearms.  Hold the plank position for 60 seconds, repeat.

The original core workout was the dreaded sit-up, but now most personal trainers will agree the plank is the single best exercise to work your core muscles.  There are many different variations of the plank (side plank, plank jacks, plank twists, plank walkouts, etc) but the concepts are all the same.  It works your abdominal muscles, gluteals, quadriceps, hamstrings, back, and shoulders.  Any activity you do (running, gardening, tennis, golf, rowing, cycling, etc) will be easier with a strong core.

 

Portfolio construction is very similar.  If you have a solid core, it will help stabilize your portfolio to handle the natural gyrations of the markets.  Your core needs to be solid and defensive but also keep up to the growth of the equity markets.

 

Much like our personal abdominal muscles (mine are a little squishy) each individual’s core portfolio will look different.  I highly recommend you talk to a professional to ensure that your core matches your unique needs and risk tolerance.  Here are a few ideas to give you a guideline to work with.

 

ASSET CLASSES – some believe this is the single most important part of portfolio construction.  I don’t pick favourites but I concur that it is something to spend some time on.  Your investment needs and risk tolerance will steer you in the right direction here.  If you are looking to preserve capital you might want an asset breakdown that looks like this:

 

Cash – 10% Fixed Income & Preferred shares – 60% Equities – 30%

Capital Preservation - Katevatis Wealth Management

 

If you are more growth oriented with the ability to weather the volatility of equities your asset allocation may look like this:

Cash – 5% Fixed Income & Preferred shares – 20% Equities – 75%

 

Growth Portfolio - Katevatis Wealth Management

 

SECURITY SELECTION – with so many types of securities to choose from it is impossible to recommend specific holdings without knowing you.  Watching TV and reading newsletters can give you ideas but just because they are right for others (family, friends, neighbours, Warren Buffett, etc) doesn't mean they are right for you.  With regards to your Core holdings they should be defensive in nature.  You want stability here, value names over growth.  Some investors like a basket of individual equities but it is also a good spot for Exchange Traded Funds (ETFs) or mutual funds.

 

However you decide to construct your core, make sure it matches your unique investment objectives and risk tolerance.  You can also use the online Second Opinion tool to help determine what this is.  Once you have a good core you can then layer on some higher risk or “fun” investments to go with it.

 

Think of it as indulging with a donut/beer/chocolate after a good core workout.