3 Ways to Protect Yourself from a Rocky Stock Market
As we all know, Wall Street conditions can be unpredictable. Even in times of relative stability, we all know it won’t last forever. It is always best to look ahead to the future and prepare for every situation, particularly when it comes to your retirement fund.
Review your asset allocations. Each investor has their own risk tolerance, which must be balanced with their desire for growth. You have likely engaged in this discussion with your financial planner many times. But if you’re beginning to feel concerned about the future of the stock market, the first thing you should do is review your assets yet again. Is your portfolio diversified across a mix of stocks and bonds? Have you included cash equivalents among your asset? Even if you conclude that you feel safe about your strategy and nothing need to change, you will sleep better at night having reviewed it.
Ask yourself, “What is my worst-case scenario?” You can’t always predict the stock market, but you can take stock of your own risks. How much money could you actually stand to lose in a serious downturn? You certainly don’t want to lose everything you have, but how much is too much? If you find that you’re over-invested in risky assets, you might consider a less risky approach.
What is the impact of a major loss? Let’s assume you lost everything you have invested in high-risk vehicles. Can you live on the income from your lower-risk investments? If so, you might feel comfortable with your current level of risk. On the other hand, if you wouldn’t be left with a dime to your name, you might be risking too much.
As you already know, investments that carry a higher risk usually carry the greater potential for growth. But you don’t want to gamble with your entire future. Talk to your financial advisor about placing some of your assets in lower-risk vehicles, and keep in mind that your risk tolerance and desire for growth can each change over time.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.