Investment Planning

What kinds of investments are suitable for you will depend on your individual circumstances such as age, the value of your assets, your planned retirement date, expected savings before retirement, the size and timing of withdrawals after retirement—all tempered by your tolerance for risk.

Sigman Financial Fitness® recommends two general strategies when considering your investment options:

Stay Cheap and Passive

Open an investment account at a discount broker, where costs to hold a smaller account open and to trade are cheap. Consistently invest monthly in a small variety of index funds that provide exposure to domestic and foreign stocks and bonds, and periodically re-balance their % allocations in your portfolio. By consistently investing monthly, you dollar cost average your basis in the funds, and by reallocating periodically say, 2–4 times year, you trim off gains in one sector and reallocate to a sector or security type that is not performing as well.

You will have to be satisfied with exposure to losses as well as earning broad market returns. You will not “outperform” the market. However, that’s good enough.  Studies consistently show that index funds outperform 75% of actively managed mutual funds. So your index funds will be doing better than most active mutual fund managers. Sigman Financial Fitness® clients get specific recommendations as to which indexes to consider. Generally speaking, if you’ve got under $100,000 in assets to invest across one or two accounts, you’ll want to consider this route until your nest egg grows large enough that professional money management begins to make economic sense.

Stay Active and Use a Thrifty Money Manager

This is Lauren’s preferred approach, for savings in excess of $100,000, and during volatile financial market cycles. Keep transaction costs low by using a quantitative model, and actively invest in sectors through the use of index, mutual and exchange traded funds that have the possibility of outperforming the market. Hedge your positions with cash to limit volatility of returns so you can sleep at night.

  • Drive with the brakes on. Think of this style of investing as weaving through traffic at rush hour. Zoom through the traffic lights when they are green, but apply caution (and your brakes) when the light turns yellow. A red light might be a good time to buy securities at great prices.
  • Banish volatility from your nest egg. You might under perform the market slightly in “hot” years, but you won’t give anything back in the down years.

Fee–only money management services for Sigman Financial Fitness® clients are provided by All Season Financial Advisors, (“ASFA”) an independent fee–only Registered Investment Advisor headed up by strategists Samuel F. Jones and Sean Powers  and their team of talented independent money managers. Lauren is an employee of ASFA, providing comprehensive financial planning services to ASFA clients.

Investment strategies at ASFA are uniquely designed to manage market risk through trading and hedging techniques, making them especially suited for today’s volatile markets.

Want more information? Talk to Lauren and together, we’ll determine if money management services are a good fit for your needs.