Hey Marc! How will the tariff wars affect the stock market? Should I get out? What should I buy?
All good questions, for a person in the growth phase of life. Our clients, for the most part, are in the “I can’t afford to lose money” phase of life. So, perhaps a different question is more appropriate.
Hey Marc! How can I position my assets so that I won’t get hurt by market unpredictability?
You see, when your portfolio is allocated properly, the craziness of society and White House events don’t cause you financial concern. In yesteryear, not that long ago, we would use a calculation of 100 minus your age, should be positioned in equities (stock) and the rest in bonds, and you should only withdraw 4% to not spend down your nest egg to zero before your eyes close for good.
We don’t buy into that method. It just doesn’t work anymore. Bond rates are awful and as interest rates climb, bonds and bond funds that you buy today or bought within the last few years reduce in value. In order to get any kind of a decent interest rate, you seemingly have to tie up your money for an eternity. Mutual funds are loaded with fees; front end, back end, sideloaded (12B1 fees). Some brokers even sell portfolios that are made up of mutual funds that have loads built in (even if they are no load) and actually have the audacity to charge a management fee on top of the funds’ management fees.
Maybe a more appropriate idea is to build a portfolio that has a portion in investments that can participate in the potential of the stock market but fully insures the principal. Maybe even guarantee income and returns. Position some assets in stable companies whose share prices don’t bounce around much but pay higher than average dividends. After all, we are looking for retirement income. All of this, remembering to keep a healthy amount in a cash position for emergencies and day-to-day needs. And, as important as all of that, ZERO to no more than 1.2% management fees on managed portions of your portfolio.
At American Retirement Advisors, we believe in a team approach. Your Retirement planning advisor meets with you first to discuss your wants, needs, and goals, as well as your family dynamics. We take a few minutes to take an inventory of what you have done so far. After the first meeting, the case goes to our Research Analyst who will review and organize all of the information. Then, one of our planners will allocate the portfolio for a starting position. The team will also review and rebalance as necessary, always keeping your goals, safety, fees, and return in mind. Compliance will then review, for appropriateness. The last step is you. It all gets presented to you. Take the custom-designed presentation book home to review. Come back in a week or so for more clarification. Like what you see, schedule the next appointment to implement the plan. We will then meet on a regular basis to take inventory of how the plan fits your life and adjust when needed. The entire planning process is a service that we provide our clients, free of charge. We just want you to be taken care of the way you should be.