Why is it important for individuals to devise an investment strategy?
The importance of an investment strategy is to keep you on track; think of it like a road map. Inevitably, there will be bumps in the road in the form of market volatility and temporary losses. A well-defined and agreed upon strategy should deter you from going off course and making poor decisions that will permanently impair the wealth that you are trying to build.
What should one consider when devising such a strategy?
Common considerations when crafting an investment strategy are age, goals, risk tolerance, time horizon and investing knowledge. All of these pieces help put together a puzzle in the form of a strategy that is clear, concise and understandable.
Our readers are in different stages of life. Some have children and are planning for their education. Some are empty nesters planning for retirement. Is it ever too early or too late to create an investment strategy?
There is no better time than the present to create and implement an investment strategy. Everyone’s financial needs and goals evolve over time, and it’s important for people to understand that and be able to navigate a changing landscape. For instance, a young couple might desire to save money for their children’s future college education expenses. There are tools, such as 529 accounts, that can help achieve this goal. Often, once this goal is accomplished, this evolves into empty nesters that might want to shift their focus to saving for retirement which requires a new strategy. Investment strategies are rarely static; they need to be monitored and amended as life changes. If you have financial goals, no matter your stage of life, it is important to put an investment strategy in place to help you accomplish them.
Would you say that your advisors help create a roadmap for wealth management?
Creating a roadmap for our clients is one of the most critical roles our advisors have. We spend immense amounts of time and effort discovering what our clients’ objectives are along with their motivations. It’s important that our clients have a clear understanding of what their desires are and how we’re going to accomplish them together. We want them to have confidence in the strategy being implemented so they can spend more time doing the things they value most.
Specifically, how can investment advisors help clients invest in their financial future?
Investment advisors play a critical role in helping someone accomplish financial goals in the most efficient and cost-effective way. Financial, retirement, estate and tax planning all play a critical role in people’s lives, and a financial advisor should have the tools and/or network to make sure all these areas are addressed appropriately. Oftentimes, we serve as the financial quarterback in our client’s lives. If we don’t have the specific domain knowledge that a client needs, we’ll connect them with the appropriate person and stay as involved as they would like to ensure they’re receiving the care that we demand.
There is no better time than the present to create and implement an investment strategy.