``` | |  |  | Portfolio Strategy Update Reducing Concentration. Broadening Opportunity. Staying Aligned With Your Plan.We wanted to share the thinking behind recent portfolio adjustments we have been making across many client accounts where appropriate. | | For many years, a portion of client portfolios included 20 to 25 individual stocks. Historically, this area helped us pursue strong results and manage volatility. More recently, however, we believe the opportunity set has changed. The purpose of this update is to explain what has changed, why we believe these adjustments are appropriate, and how the changes fit within the broader goals of your financial plan. | Key TakeawaysReduce concentration Less reliance on a smaller group of individual stocks. | Broaden diversification More exposure across companies, asset classes, and strategies. | Reallocate where appropriate Focus active decisions where we currently see better opportunity. | Keep the plan intact Your goals, risk tolerance, and long-term strategy remain the foundation. |
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| What Changed Moving from concentrated stock positions toward broader opportunity | We are working to reduce certain individual stock positions and reinvest the proceeds elsewhere in client portfolios where appropriate. Alongside that, we have identified what we believe are stronger opportunities that we have been adding to over the last year. These include select bond funds, international funds, private equity, and other alternative investments. For now, this is where we are focusing our search for outperformance, diversification, and lower volatility going forward. | Reduce
Concentration | Broaden
Opportunity | Stay
Plan-Focused |
| Our Thinking Why We Made This Change | 1 | Less opportunity to outperform with large individual U.S. stocks The U.S. large-cap market has become highly concentrated. To meaningfully outperform, investors often need to hold unusually large positions in a small group of companies. We do not believe that is a responsible way to pursue the investment results you are looking for. |
2 | Less exposure to company-specific surprises The pace of change driven by artificial intelligence has been striking, and in our view it could continue to reshape industries in ways that are difficult to predict. Holding fewer individual stocks helps reduce the risk that one company’s or industry’s situation has an outsized effect on your account. |
3 | Broader diversification Instead of relying on 20 to 25 individual stocks, portfolios may now have additional exposure to a much broader set of companies through a mix of funds and ETFs. We believe this wider diversification helps soften the impact of any one company or industry having a bad stretch. |
4 | Access to additional investment opportunities We now have access to opportunities that were not previously available to many clients, including private equity and other alternative investments. We believe these areas can play a valuable role in pursuing long-term results where appropriate. |
5 | Looking for outperformance where we believe it is more likely Rather than trying to outpace the S&P 500 by holding concentrated positions in a few large U.S. companies, we are focusing our active decisions where we believe thoughtful selection can make a bigger difference: bonds, international markets, private investments, and other areas of the portfolio. |
| What This Means for You Your financial plan remains the foundation | The overall goals of your financial plan have not changed. Your strategy, your risk tolerance, and your long-term objectives remain the same. As in the past, we continue to prioritize finding the best investments for you and your portfolio. We believe these adjustments are designed to reduce unnecessary concentration risk and better position portfolios for the changes occurring throughout the investment landscape. | A few important notes These comments reflect our current views and are not a prediction or guarantee of future results. Investment strategies vary by client based on individual goals, risk tolerance, tax circumstances, and financial planning needs. All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results, and diversification does not assure a profit or protect against loss in declining markets. References to investment categories, funds, or strategies are for general informational purposes only and should not be interpreted as a recommendation for any particular client. Private equity and alternative investments may involve additional risks, including limited liquidity, valuation uncertainty, higher fees, and limited transparency, and may not be appropriate for every investor. |
| Have Questions About Your Portfolio?We would much rather talk it through than have you wonder. If you have questions, concerns, or simply want to discuss how these changes apply to your financial plan, please reach out. Or call us at 603-625-8400. |
| Thank you for the trust you place in us. We take it seriously, and we appreciate the opportunity to manage your portfolio. Thank you,
Chris, David, & Glenn
Sweeney Financial Management | Sweeney Financial Management 575 Front St • Manchester, NH 03102 603-625-8400 |
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