There is no single investment that provides preservation, high current income, growth potential and liquidity all at once. Investing involves trade-offs, and its important for you to understand the trade-offs involved with your options. We use your financial plan to illustrate how certain investments and strategies can be best aligned to achieve your objectives. When tailoring an investment plan for you, we consider the following:
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Purpose of Your Investment
What is both the current & future purpose of your investment? (for example, your goal might be to create steady income during your retirement, and then to leave the remainder to others)
How long until you reach your goal? How long does the money need to last after reaching your goal?
How much risk are you comfortable with (risk tolerance)? How much risk do you actually need to take to reach your goal (required rate of return)? How much risk can your financial situation realistically bare (risk capacity)?
What type of investments and what type of accounts are best for your specific goal? (i.e., Roth IRA, Traditional IRA, Taxable account).
What investment options will best serve your purpose of realizing your goals, while controlling costs?
Do you consider yourself a knowledgeable investor? How did you feel & react during the great recession of 2009? How do you think you’ll react next time?
Flexibility / Control
How important is investment liquidity to you? Are you willing to give up flexibility for security? Note – When appropriate, we seek to construct investment portfolios that give our clients the flexibility and liquidity to adapt to changing situations and respond to unexpected circumstances, without suffering penalties for making changes. (for example, to help our clients get both predictable income and protect their assets in retirement, we construct portfolios using high-quality individual bonds, CDs, ETFs and mutual funds which all offer liquidity when necessary.
Building Your Growth Portfolio
|PRIMARY OBJECTIVE||Long-term growth, tax-efficient, low expense, diversified|
|SECONDARY OBJECTIVE||Flexibility, liquidity|
|STRATEGY||Seek higher returns by focusing on controllable factors, such as expenses, portfolio rebalancing, and tax-loss harvesting|
|TYPE OF INVESTMENTS||Exchange traded funds (ETFs), mutual funds, individual stocks|
|FUND FAMILIES||Vanguard, Dimensional, iShares
|CUSTODIAN||Betterment, Fidelity, Vanguard|
Building Your Income Portfolio
|PRIMARY OBJECTIVE||Predictable income, asset protection, growth potential|
|SECONDARY OBJECTIVE||Reversibility, Flexibility, Liquidity|
|STRATEGY||Employ a hybrid approach to fund spending needs precisely and predictably. Deliver the best of pension-like income, along with the higher return potential of a traditional portfolio.
A. Begin by carving out and dedicating specific portfolio assets toward a low-risk strategy, which delivers consistent income over your chosen time horizon, regardless of how the markets are performing.
B. Remainder of portfolio is invested in a broadly diversified stock growth strategy to replenish the income portion over time.
|TYPE OF INVESTMENTS||Individual bonds, certificates of deposit (CDs) and other low-risk investments, along with ETFs and mutual funds|
|FUND FAMILIES||Dimensional, Fidelity, Vanguard
|CUSTODIAN / ASSET MANAGER||Fidelity Investments / Asset Dedication|