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Investing In A Financial Partner As Sound Strategy

When looking to invest one’s money, it’s important to determine what strategies should be in place to help achieve long-term goals. This isn’t always easy to do, so partnering with a financial advisor may be the best investment overall.

“By working with an advisor who makes understanding your personal, family and business goals a priority, you have a true partner in helping you navigate everything finance-related,” says Ann Hollis-Young, managing director and senior wealth advisor at Southern Oak Wealth Group in Brentwood. “Whether you’re talking about investments, lending, or how to get the most out of your business, all of those things and more will tie in together and play a part in what your and your family’s net worth will be.”

With the fluctuations in interest rates, what to invest in has really changed. “After years of rates being historically low, there was no need to take on interest rate risk by being too heavy in long-duration fixed income,” says Patrick Poling, Southern Oak managing director and senior portfolio manager. “If you were holding a bond when rates went up, that bond was probably negatively impacted from a price perspective. Basically, the low bond yields were not enough of a return to offset the risk. So, we were light on bonds and other normal fixed-income investments for a long time.”

However, starting the second half of last year, these types of investments began to play a much larger role in portfolios.

When it comes to retirement funds, the same strategy applies. “With rates being higher, assets we suggest you have in your retirement account include fixed-income investments of a longer duration,” says Jonathan Trusty, Southern Oak managing director and senior wealth advisor. “And, we are always proponents of doing one of two things. If you have a 401(k) and your company matches what you put in, at least force yourself to contribute up to that match if you’re able to. And then beyond that is to completely maximize your 401(k) contributions if you can. If you’re under 50, that’s $23,000 a year, and if you’re over 50, it’s $30,000.”

Similar advice holds true for college savings accounts. “While we still suggest adding as much as you can, what has really changed is what you’re holding inside of these accounts,” he says. “The choices you get in these are very similar to retirement accounts, so you're probably picking from about 30 different mutual funds. Two years ago, we would not have put nearly as much of a percentage in fixed income instruments (bonds mostly), but now, especially if you're getting close to using these funds, we suggest going much heavier on these.”

So, what exactly are bonds? “The difference between a stock and a bond is that with a stock, you’re owning a piece of that company, but with a bond, you’re lending them money and they are promising to pay you back an interest rate over a specified period of time and eventually paying your principal back,” he says. 

Patrick stresses it’s important to not try to chase returns too much. “In the past let’s say 15 months, most of the gains we’ve seen have come from big-tech stocks, and when people see that, they can have that fear of missing out and start to pile into investments that have already doubled in the past year and a half. But, it’s important to not get in over your head and put too much into the high-flying investments after a run-up. From a volatility standpoint, diversification usually works best.”

Another sound piece of advice: “When the market is going up like this and there are so many options, be careful not to be taken in by something that sounds too good to be true,” he says. “There are new strategies out there that work well, but you definitely want to do your due diligence and make sure that one, you're not getting into something risky, and two, you're not locking your money up into something where you can't access it.”

For this team, the most enjoyable part of their jobs is working with long-term clients who are coming up on retirement. “We showed them a plan so now they don’t have to worry about spending what they want to, living as long as they want to, and being able to do the same things they were doing before,” says Patrick. “It puts their minds at ease and allows them to breathe a sigh of relief.”


“We showed them a plan so now they don’t have to worry.”

“From a volatility standpoint, diversification usually works best.”

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