A rising market can make risk easy to forget. Michael Bonfanti says that is when investors should pay closer attention.
The founder of Bonfanti Investment Services sees a potential trap in strong market performance: Investors can grow comfortable with gains and give less thought to what might happen if conditions change.
“Risk management can seem unnecessary right up until the moment you need it,” Bonfanti says.
Social media can make investing look like a matter of picking the right investments. But Bonfanti says the less visible work—managing taxes, diversifying holdings and deciding how much risk to take—becomes particularly important when markets turn unpredictable. Advisory fees appear on a statement; the value of professional risk management can be harder to measure until it helps an investor weather a downturn.
Bonfanti founded the Prairieville firm in 2009, after about five and a half years at a large financial advisory firm. He earned his Certified Financial Planner designation in 2012 and moved to a registered investment adviser model in 2016. Today, the firm manages about $75 million in investments for individuals and families.
Diversification and asset allocation remain central to his approach, but his views on where to invest have evolved. Higher interest rates have made bonds more attractive to him after years of historically low rates. He also sees a larger role for real assets and commodities.
The goal, he says, is to prepare for a range of outcomes and adjust as conditions change, rather than build a portfolio around a prediction of the next market move.
Bonfanti is bringing the same emphasis on regular evaluation to employer-sponsored retirement plans. After earning the Certified Plan Fiduciary Advisor credential, he identified opportunities for businesses to reduce 401(k) costs while improving investment options and employee benefits.
“Technology and competition among providers have created opportunities for a lot of businesses to lower costs while actually improving the plan and giving employees a better retirement benefit,” he explains.
A plan that worked for a business with five employees may need another look when the payroll reaches 30 or 50, he says. As companies grow, employers should revisit costs, plan design and employee participation while keeping up with their fiduciary responsibilities.
His roughly 15 years of involvement with the Ascension Chamber of Commerce have also given him a broader view of what supports business growth. He sees the parish’s schools, quality of life and business community as closely connected: Families drawn to the area help expand the workforce and customer base, which in turn can encourage business investment and create opportunities for residents.
For Bonfanti, a growing business needs to regularly reassess its retirement plan just as an investor needs to revisit a portfolio. In both cases, he says, what works today may not fit tomorrow’s circumstances.
