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Arturo Neto

CFA
Personal Finance, Investing, Small Business
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“With over two decades of experience, Arturo Neto is founder of NFG Wealth Advisors, a provider of wealth management services to ultra-high-net worth individuals and families and aspiring high net worth (AHNW) individuals. ”
Firm:

NFG Wealth Advisors LLC

Job Title:

Chief Investment Strategist

Biography:

Arturo Neto, CFA, is the founder of NFG Wealth Advisors - a boutique Registered Investment Advisor in the State of Florida that offers broad wealth advisory services to individuals and families as well as investment strategy and research services to small and mid-sized advisors.

Arturo was previously with EFG Capital from 2013 to December 2016 where he joined to co-lead the planning, development, and implementation of the Investment Strategy Group. He led the firm’s private placement due diligence efforts in addition to serving as a senior member of the team creating model portfolios, developing investment themes, managing tactical allocation strategies, monitoring portfolio management activities, conducting equity and mutual fund research, and preparing and delivering investment-related seminars and presentations. Prior to joining EFG, Arturo was an Investment Strategist at HSBC in a similar role.

During his 20 years of experience in financial services, he was also the Investment Officer for a Latin American multi-family office specializing in hedge fund and private equity investments and he has worked in a variety of roles within financial planning and analysis and strategic finance consulting. His career includes positions at Accenture, Gap Inc. American Express, and State Farm Insurance, as well as project work in a variety of other Fortune 500 companies. During his consulting and corporate finance tenures, Arturo’s primary focus was on practice management, process improvement, and financial analysis.

Arturo graduated from Florida International University with a Bachelor’s degree in Finance and a Master of Science in Finance degree and completed his Master of Business Administration degree from the Darden Graduate School of Business at the University of Virginia and he is a Chartered Financial Analyst (CFA).

He lives in South Miami and is married with one beautiful daughter.

Education:

MBA, Darden Graduate School of Business at the UVA

Assets Under Management:

$1 million

Fee Structure:

Fixed
Asset-Based

CRD Number:

4970646

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    Marriage / Divorce, Financial Planning, Asset Allocation
What concepts can I use to guide the allocation of assets in my portfolio?
100% of people found this answer helpful

Hi there, thank you for the opportunity to address your question. There are a variety of concepts you can use to guide the allocation of your portfolio and professional portfolio managers will probably use a greater number of them and in combinations that attempt to improve the probability of you attaining your goals. Below are a few I believe you can start with and expand from there as you become more familiar with the process of managing your portfolio.

  • Goals - in order for you to figure out how to allocate your portfolio, you must first figure out your financial goals, including income needs/wants, other assets (including other investments), liabilities, income from other sources, and expenses, both fixed and variable. Generally speaking, this type of analysis is called a financial plan and it will serve as a guideline for how you should invest your portfolio. 
  • Asset allocation strategy - this is the concept of having an overall plan for your portfolio based on the financial goals identified in the financial plan. An asset allocation strategy will dictate your target return, risk tolerance, liquidity needs, tax situation, and others. It does this by defining how much of your portfolio will be allocated to each asset class, such as equity, fixed income, or alternatives (real estate, for example) such that the combination of these assets increases the probability of generating your desired return within the risk that you are comfortable with. The asset allocation strategy is comparable to a recipe for a good meal. The right combination of ingredients creates just the right level of tastes, fragrances, and textures for a fantastic meal. Where as a lack of cohesion or planning might result in a meal being too salty, or too heavy, etc. Too often we see portfolios of stocks that on their own make sound investments, but whose combination results in unwanted risks or exposures. 
  • Diversification - its important for a portfolio to have enough diversification so that a decline in one asset class or position is less onerous on the portfolio than if the portfolio was concentrated in one position the declines. For example, if a position makes up just 5% of a portfolio and it declines by 50%, the portfolio will only decline by 2.5%, provided all other positions remain the same. On the other hand, if that position makes up 50% of the portfolio (only two positions in the portfolio), then a 50% decline in that position will result in a 25% decline in the overall portfolio. How do you know if you are well diversified? If on a monthly basis, all of your positions move in the same direction (either all go up or all go down) and it occurs frequently, you are probably not well diversified. That means that not only do you need to have an adequate number of positions in your portfolio, but you should also have positions that exhibit different characteristics. 
  • Rebalancing - setting and forgetting is a dangerous approach to investing. Over time, some positions will outperform others, resulting in weights to each position that are quite different than the original allocation. In these cases, and as frequently as monthly, a portfolio should be monitored so that positions that have deviated considerably from their initial allocations can be rebalanced. That means selling those positions that have a higher allocation than the original allocation and reinvesting in the positions that are below their original allocation. For example let's say you have two positions and your original asset allocation strategy is to have 50% in A and 50% in B. After a few quarters, A has outperformed B such that A now makes up 60% of your portfolio and B makes up only 40%. In this case, you would sell 10% of A and invest it in B so your ending balance is back to the original 50/50.

There are quite a few other concepts involved in managing portfolios - too many to list here - but I hope this gives you some insight on where you could start the process. 

Good luck and please reach out if you need any clarification.

 

Arturo Neto, CFA

April 2018
    Financial Planning, Choosing an Advisor
Is a fiduciary or a broker better for planning and investing assets?
43% of people found this answer helpful
June 2017
    Investing, Asset Allocation, Bonds / Fixed Income
Is there a place for junk bonds in my portfolio?
17% of people found this answer helpful
July 2017
    Investing, Bonds / Fixed Income, International / Global
Are bond funds a good investment choice for the risk averse?
17% of people found this answer helpful
August 2017
    College Tuition, Financial Planning, Lifestage Based Planning
Which portfolio should I choose for my daughter's 529 plan?
0% of people found this answer helpful
June 2017