Date: June 13, 2022

Why We Recommend a Complete Review of Your Investment Plan

You work too hard for your money to take avoidable losses to your portfolio. That is why, as your Arizona financial advisors, we recommend a complete review of your investment plan. 

Successful investing is a long-term endeavor; however, long-voyage ships still change course to avoid storms, at times. Today’s market conditions are the financial equivalent. 

Rising Interest Rates Expected

Historically, in periods of high inflation, the Fed has raised interest rates in an attempt to diminish its effects. Inflation has gained steam over the recent months and subsequently rates have begun to move higher. 

Unless your portfolio is specifically configured for the resulting unusual economic environment, the sooner you have it rebalanced, the better. Assets that are normally solid choices may become investment mistakes for the uninformed.

If your portfolio has an allocation to fixed income assets, you have probably noticed a drop in value. A combination of rising interest rates and supply-and-demand has likely lowered their value.

Most fixed-income assets have a “fixed” interest rate.  This rate is the same for the life of the bond. In times of rising interest rates, that fixed rate asset tends to lose value.  A 3% investment becomes less valuable if there are now 4% investments with the same maturity and risk.

If you schedule an appointment today, we are not going to suggest dumping 100% of your fixed-income assets. The idea is to identify the current risks that we see and make sure your fixed income allocation is appropriate considering those risks.

Why Diversification Is Important in Investing

The other safeguard we would like to build into your investment plan is diversification.  A properly diversified portfolio will maximize returns and minimize risks.

During periods of inflation it is especially important to have proper diversification.  There are investments that will strive with inflation and it is critical to have those in your portfolio.

An allocation to good alternative investments will help during these times. These can include commodities (e.g. soybeans, aluminum, and natural gas), real estate, and alternative fixed income. 

Bottom line, make sure you have some investments that “zig” while the stock and bond markets “zag”.

Get Weather-Ready With a Complete Review

umbrella signifying protection against investment losses

If you think of an investment advisor as a physician for your wealth, a complete review is like a thorough exam of your monetary and investing health. We need your financial vital signs in order to treat your problems and prevent them from worsening. 

So, we ask you to meet with us in order to assess the status of your portfolio, savings, and monetary habits. Your personal wealth management needs can be as unique as your fingerprint.

Some common questions we should address at a review include:

  • Are your assets being preserved?
  • Is your investment strategy proceeding efficiently?
  • Are your taxes being effectively minimized over the year?
  • Is your income protected?
  • How is your overall plan benefiting your family?

There are more reasons to get up-to-date than the current economic situation. For instance, in the wake of COVID, many people began to rethink their life goals and priorities. If retiring early or a change in occupation is now an important personal goal, your portfolio should be strategized accordingly. Let us help you make your money last a lifetime.

Bottom Line

At Watts Gwilliam, we specialize in retirement planning for high-net-worth individuals and families.  Our experience and expertise can help you safeguard your wealth as deftly as it helps others start accumulating it. 

Contact us to get your assets started on a better path.

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David Watts

Dave is one of the firm’s founders. He helps business owners, professional athletes, and other high-net worth clients develop and implement financial plans and strategies. He also specializes in helping those with single-stock positions to diversify and manage their financial lives. Other areas of specialty are wealth transfer plans for concentrated stockholders and business owners; tax minimization strategies for those with employee stock options; cash flow management; and risk management planning.