In the many years that I have been fortunate to work with couples and families as they plan for their financial future, I have seen, heard, and witnessed just about every type of financial mindset you can imagine. From the “Free Spirits” to the “Doom and Gloom” to the “Fiscal Hawks”— it’s been a colorful journey. One thing that continues to surprise me is the persistence of the idea that all that matters is the allocation of one’s portfolio.
In our retirement workshops, we often discuss several retirement planning issues and concerns that we frequently hear from folks who come to see us. The overwhelming majority of people who attend are coming to learn how they can make their retirement income last longer than they do. However, we still see people who have been trained to believe that the “right” portfolio is all that matters. I say “trained” because I believe that the majority of what some people know comes from the marketing of Wall Street and financial institutions.
Instead on focusing on just portfolio allocations— investors and clients should be focusing on creating an actual PLAN.
“Why is that?”, you ask.
The answer is simple— A portfolio is simply a tool that should be used to achieve your financial goals. The measure of a portfolio’s long-term success should be how well it enables you to meet your goals—NOT how it performed against the S&P 500 last year. The best benchmark for a portfolio is the answer to these questions,
“Am I on track to make sure I know for certain that I’ll never run out of income during retirement?”
“If I get sick or die unexpectedly, how could my family be impacted? (this is big if one spouse handles all of the finances)
“If my spouse gets sick or dies unexpectedly, what’s my plan?”
“If I need to take care of my aging parents, will I need to provide financial assistance?”
“Is there anyone in my family that I want to help with education or financial expenses?”
“If taxes or healthcare costs go up unexpectedly , how will I be impacted?”
Of course, there are more questions…but you get the idea. Retirement planning is much, much more nuanced than making sure your portfolio allocation is appropriate for your age. In fact, fund giants like Vanguard are trying to find ways to add advice to their platform because they realizing how valuable financial expertise can be to clients today.
Right now, stock markets are touching all-time highs, as the DOW, S&P, and NASDAQ have all touched record closes during this current bull market run. More and more, we are seeing the slow grip of inertia and complacency weave their way into the mindset of investors. What an amazing time to put a solid plan in place without the fear of market volatility or unexpected life events hindering your thought process. Don’t let this opportunity to plan for the future pass by—take the time to build your plan today…one that will protect you tomorrow in ways that a portfolio can’t.
Investment Advisory Services offered through AlphaStar Capital Management, LLC, a SEC Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. AlphaStar Capital Management, LLC and Vertex Capital Advisors, LLC are independent entities.
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