Retirement Planning (Part 1)
Retirement Planning & Our 6 Core Principles
Our Retirement Planning process is rooted in providing each of our clients honest, objective advice with a personalized retirement plan – that’s our goal. You can receive a customized report with strategic recommendations tailored to your goals and lifestage.
Whether you choose one of our Asset Allocation models or direct the asset mix yourself, you will have full-time access to HuttoDean and our recourses. Picking the plan that is right for you is not always an easy task, that’s why we are committed to tailoring a plan that’s right for you and your needs, wants, and desires.
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Our 6 Core Principles:
- Faith in the Future – We think it is vital to always believe that our best days are a head of us, not behind us. That is, that human progress, and the markets that they drive, is accelerating not decelerating. A good long term investor cannot be afraid of the future; simply put, one must be optimistic in the face of uncertainty.
- Patience – Setting goals and executing a plan are meaningless if patience is not present. I define patience here as the ability to remain calm in the presences of extreme fear or extreme euphoria; this can be particularly challenging in light of our 24/7, in-your-face, trading-mentality media.
- Discipline – It was once said that continuing the same process and expecting a different result is the definition of insanity. We believe discipline to be the ability to continue doing what is right…even if it doesn’t look like it right now. A, sort of, stay-the-course mentality that has shown itself to work over many decades.
- Asset Allocation – This is the long-term mix of equities, fixed income investments and cash. It is our opinion that one must always maintain a presence in equities, fixed income investments and cash; regardless of age or life stage. Of course, the mix is different for everybody; that’s where HuttoDean & Co. can assist you in applying the right “mix” to your portfolio and apply patience and discipline to that portfolio.
- Diversification – Not to be confused with asset allocation, diversification is the application of a portfolio in each asset class. For example: small cap, mid cap, and large cap sectors are all equities, but have distinctly different characteristics and can act very differently at different times. Therefore, we apply disciplined models to maintain a balanced portfolio in different asset classes AND within each asset class. This removes the temptation to jump into a “hot” sector just in time to have it cool off or visa versa. Diversification does not assure a profit or protect against loss.
- Rebalancing – This is probably the most underrated tool that any investor can and should employ. Simply put, rebalancing a portfolio once a year, back to the original composition or recommendation, by definition reduces the amount in funds that have disproportionately run-up in value and increases the amount in funds that have not kept up. This is, of course, the exact opposite of what most people do, with most of their money, most of the time. Therefore, all of our proprietary models have an annual rebalance feature so you don’t have to remember, but more importantly you won’t be tempted to do something different (and undisciplined), each year.
Sources:
Behavioral Investment Counseling, by Nick Murray
*The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by GWN Securities, Inc. Indices are unmanaged and cannot be invested into directly. Investment in stocks will fluctuate with changes in market conditions and when sold they may be worth more or less than there purchased value. Past performance does not guarantee future results. Example used as illustration only, not indicative of any particular investment, actual results will vary. Neither diversification nor asset allocation can ensure a profit or protect against a loss. As with any financial matter consider consulting your qualified representative before taking action. Nick Murray is not affiliated with Hutto Dean Financial Advisors or GWN Securities, Inc.
