INVESTMENT MANAGEMENT
How I Invest and Manage Money
The prudent money management program is a combination of 4 investment strategies.
- Core Investments Strategy – These are longer-term investments that provide a foundation for the overall investment strategy. They are selected for their ability to manage for investment risk as well as investment growth. They are also selected for the consistency in their approach.
- Dynamic Investment Strategy – These investments are used to protect the overall investment account as well as to produce growth in the account. These investments are actively managed. It was this strategy that was responsible for our positive return in 2008 (for more details, click here).
- Special Opportunities – These investments are selected based on specific opportunities. This could be investments in gold, oil, specific sectors, etc.
- Cash/Bonds/Fixed Investments – This is considered the more conservative portion of the investment strategy.
In my initial meeting with each prospective client, I evaluate if this approach is appropriate and suitable for their situation based on risk level and life circumstances.
My Thoughts on Taking Risk
You take risk to make your money work harder. Money has to grow over time in order to take care of future financial goals. It would be nice to have millions of dollars in the bank sitting in United States Treasury Bonds, taking no risk. If you had that kind of money, you wouldn’t need to take risk. Unfortunately, the average individual in America doesn’t have that luxury. Therefore, you have to make your money work harder.
I look at risk much differently than most people who manage money. I look at it in 3 ways.
First, I invest to protect clients from the large losses that can occur because of risk. Most investment strategies do not incorporate strategies to manage for risk. I think that managing for risk is just as important as investing to grow your investments. Fortunately, this proved to be successful during the 2008 bear market.
Second, I define risk as a loss of investment value AND a loss of time. Time is a critical component of risk. For most investors, the recent bear market has taken away 10 to 12 years of investment growth. Although the loss of investment growth is a tough one, losing the 10 to 12 years is much more damaging to future goals.
Third, I only take risk that my clients can afford to take. You always have to look at the worst case scenario by answering the following question. If I take this risk and I lose money, can I make that money back quickly? If you cannot answer that question with a yes, you do not take the risk.
If you want to consider becoming a client or just want more information, there are several ways in which I can help you. The best way to find out is by either contacting me at my office at 972-386-0384 ext 202 or sending me an e-mail by clicking here.