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Improve your wealth IQ in just minutes by reading through key questions and answers related to wealth management.


SPM's Approach to Wealth Growth 

Risk Diversification

Planning for Retirement

Wealth Growth versus Wealth Utilization

Separately Managed Accounts


SPM's Approach to Wealth Growth 

The foundation of SPM's investment philosophy is based on personalized client service.  We are guided by a commitment to honesty and integrity using a disciplined investment process, diversification, controlling risk, mitigating volatility, with an emphasis on a consistent long-term perspective on investments.

To create wealth, you must:

  • Define your goals
  • Collect current financial information to define where you are today
  • Create a strategy to:
    • Enhance cash flow
    • Reduce taxes
    • Protect assets in varying economic conditions
    • Select investments and asset allocation that match your future short term and long term financial goals AND your risk tolerance
    • Protect you against loss of income or accumulated assets due to illness, disability, or death
    • Enhance your estate plan
    • Provide for business succession (if applicable)
  • Implement your plan (reference Additional Disclosures).
  • Update and modify your plan as the situation inside your life and environment outside your life changes
  • On-going review of your plan to ensure you stay on target to meet your goals

Know Your Goals

Investment and retirement planning is not a one-time event. Optimizing your wealth is an ongoing process. It’s something that requires regular monitoring — at least once a year — to ensure you remain on target with your goals and your investment strategy.  Having a strategic plan in place will help you during all kinds of market conditions; helping you leverage bull markets and shoring you up in bear markets.

Disciplined Investing

Using suitability questionnaires, we customize our investment recommendations to suit our client’s objectives, time horizons and risk tolerance.

While this does not guarantee investment success, it provides a framework for discipline in the wealth management process and reduces the possibility of making inappropriate investment decisions.  Analysis should specify the targeted investment returns, serving as a benchmark for assessing the performance of the portfolio.

How Risk relates to Investment Planning

The risk of losing money is an obvious one, but there are others you may not have considered.  Understanding risk can help lead you to a strategy to reduce it.

Market Risk

Every type of investment involves some risk.  Only you know how much or what kinds of risk you are comfortable with.  What’s more, your willingness to accept certain levels of risk will probably change during your lifetime.  You’ll feel most comfortable if you can find an investment strategy that’s likely to meet your investment goals at a level of risk you can live with.

Risk of inflation

Inflation eats away at the value of a dollar.  If your investments don’t keep pace with or outpace the rising cost of living, you’ve lost buying power.

You can combat the risk of inflation by selecting investments that historically outpace the cost-of-living increases.  The long-term rate of inflation has averaged around 3-4%. 

Interest Rate Risk

Fluctuations in interest rates can also pose a risk.  Interest rate risk may be more of a factor as you near retirement and perhaps focus on income-oriented investments.

Longevity Risk – the risk of outliving your money

While most people look forward to living a ling life, they also want to make sure their longevity is supported by a comfortable financial cushion.  As the average lifespan has steadily lengthened due to advances in medicine, the chance of prematurely depleting one's retirement assets has become a matter of great concern.

Consider a few numbers: According to the latest goverenment data (Source: Society of Actuaries, 2000 Mortality Table, Scale G), average life expectancy in the United States climbed to 77.6 years for a child born in 2003, compared to 47.3 years in 1900.  But most people don't live an average number of years.  In reality, there's a 50% chcnace that at least one of a healthy couple aged 65 will reach age 92.

With our focus on consistent long-term results, we have found that a multiple portfolio counselor system, which divides fund assets among several investment professionals, has provided a consistent and sustainable way to achieve long-term investment goals.  The multiple portfolio counselor strategy has also helped us provide diversity and continuity.

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Risk Diversification

Because there’s no telling which investment type is going to go through the next period of growth, it’s a good idea to make your investment strategy a broad one, concentrating more heavily on the right allocation of assets to fit your investment goals, stage in life, and tolerance for risk.

In other words, you’ll want to diversify. Diversification is a time-honored strategy for helping you reduce investment risk. The thing to remember is that you’re not going to see results overnight. It takes time, and you may experience a bumpy ride while you are working toward achieving your goals.

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Planning for Retirement

What kind of retirement do you have in mind?  The more specific you are, the easier it will be to determine the level of return you’ll need and the level of risk you’ll need to tolerate to reach those goals.

One way to set your goals is to actually write down what you want out of your investment portfolio and retirement.

  1. How much will I need in retirement to meet my desired lifestyle?
  2. How much should I worry about inflation?
  3. What’s my appropriate asset mix going forward?
  4. What withdrawal rate will help me not outlive my money?
  5. How will I pay for health-care expenses?

The more time you have to achieve your goals, the more aggressive you can be.  But if you’re close to retirement, you need to consider investments with lower risk.
The more you understand your own attitudes toward investing and risk, the better you’ll be able to handle the ups and downs of the market. 

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Wealth Growth vs Wealth Utilization (Retirement Income)

Asset diversification is an integral part of successful investment planning for both the accumulation and distribution phases.  In the accumulation phase, a well-diversified portfolio can help reduce volatility, enhance compounding effects and build wealth. With patience, discipline and time, investors can generally withstand shorter term declines and meet their accumulation goals.

Clearly, the margin for error narrows in the utilization (distribution) phase. A portfolio generating an income stream cannot tolerate significant declines before capital is exhausted.

While you can’t predict what the market will do next, you can prepare for those times when you:

  • Define your short and long term goals
  • Use a disciplined investment process
  • Create diversification
  • Manage risk
  • Mitigate volatility
  • Have a long-term perspective on investments

Remember, investment and retirement planning should be thought of in years — not in days or weeks or yesterday’s headlines.

To learn more about wealth growth, visit the Wealth Growth section in our Resource Library. To read further details on the changing landscape or retirement, visit our Wealth Utilization section.

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Separate Managed Accounts - an alternative to traditional mutual funds

Investors have seen major shifts in the investment landscape over the past 10 years. Until recently, mutual funds were often considered the best choice for investors because of the benefits they offered - professional management, instant diversification, and low investment minimums. 

Today, more investors are choosing separately managed accounts (SMAs) as their investment vehicle of choice. This is because of the many benefits that simply weren't accessible to individual investors a few years ago, Including:

  • Institutional investment management
  • Ability to customize portfolio
  • Tailored tax management
  • Single management fee
  • Easy access information about portfolio holdings
  • Personalized performance and tax reporting

Low initial investment - While SMAs have historically required large initial investments, SPM can provide SMAs at an affordable minimum investment - as little as $25,000 in some cases.

Access to institutional money managers - benefit from the wisdom of institutional managers whose experience and expertise is typically not available to the average investor.

A tailored investment plan - customized for you through an in-depth consultation process with SPM - that reflects your unique financial goals, time horizon and risk tolerance. You receive a custom, written Investment Policy Statement outlining your individual, personalized investment plan.

Customized control of your money -

  • you own the securities in your account;
  • you can exclude certain social sectors or individual stocks from your portfolio;
  • you decide how to realize capital gains and losses; and
  • you choose to rebalance your portfolio either semiannually or annually.

Know Exactly What You Own and Exactly What You're Paying For It - You and those with viewing rights to your portfolio have 24/7 access to all account information via the Web. This includes performance during market hours, holdings, transaction history, gain/loss information, fees associated with the account, tax information and more.

It all starts with a comprehensive consultation with a SPM Wealth Advisor to ensure your needs and preferences are properly identified. Your SPM Wealth Advisor will then develop a custom proposal for you. With your approval, this proposal becomes your Investment Policy Statement, a personalized investment plan that serves as your financial "roadmap" to customizing your portfolio.

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The information presented is intended for informational use only and is not a substitute for investment, legal, tax, or insurance advice. State, national and international laws vary, as do individual circumstances; so always consult a qualified investment advisor, attorney, CPA, or insurance agent on all investment, legal, tax, or insurance matters. The effectiveness of any of the strategies described will depend on your individual situation and on a number of other factors (e.g. time horizon, risk tolerance, etc.)