Investment Planning

It’s often said that it’s not what you make, but what you save in investment planning. However, what you do with that savings matters. After all, growing your savings takes more than knowing about economics and markets. So, you must also understand the behavioral influences that can make a good plan go awry.  So, stay the course during rough times by In taking a disciplined approach. For example, understanding your internal biases toward fear and greed is important in keeping you out of typical investor traps.

In Investment Planning:

  1. Consider both what you need and your comfort with risk in building your investment strategy. In other words, you don’t want to sell in a downturn because you were too aggressively invested for your comfort level.
  2. Evaluate your portfolio for diversification. For instance, you invest in funds across different asset classes, geographies, sectors and more to keep all of your eggs from being in one basket.
  3. Analyze the effect of the return characteristics of different asset classes (i.e. stocks, bonds, real estate) overtime. With this, and layering on inflation and taxes, you can assess whether you need to be more aggressive or not to reach your goals.
  4. Review the fees related to each asset in the portfolio. Of course, fees should be in line with the level and quality of management received.
  5. Assess the location of various assets for tax efficiency. For example, taxes on dividend producing assets can be deferred in retirement accounts
  6. Study the impact of sequence of return risk. For instance, model lower returns early in retirement to be sure the plan stays intact.
  7. Understand the taxation and income planning opportunities and impacts. Consider tax loss harvesting, Roth conversions, varying retirement and health plan contributions and more. After all, each of these events have impending tax consequences.

Plenteous Financial Wellness Wheel

Plenteous Financial Wellness Wheel

Understand what the wheel is all about and explore the spokes to identify the planning gaps you need to fill.