short term investment

It’s Second Look—and Second Opinion!—Season
graphic shows the words "'Tis the Season" inside a magnifying glass

Clients, the markets are at a low point. It’s a prime time to revisit our holdings! Let’s take a second look. 

To be clear, portfolio reviews are part and parcel of our regular business. But these times of churn and change are a great opportunity to look more closely—and try to make sense of everything given the context. 

Conversations with some of you lately have inspired some changes. Could it be time to garner tax losses and take a different approach with some of your resources going forward? 

Our goal at 228 Main is to grow your buckets. We believe the better off you are, probably the better off we will be down the road. That’s enough for us to review and comment on your plans and planning, as well as your investment holdings and accounts. 

While it’s Second Look Season for us in the shop, could it be Second Opinion Season for anyone in your life? It could be you know folks who are paying fees for investment management when their investments don’t seem to be managed at all. Does anyone in your life have long-term investments stuck in stagnant short-term holdings? 

I often say I’m in business to talk all day. If you have questions about your holdings, I might as well be talking to you and your loved ones! And clients, please know that we have nothing to lose by your seeking a second opinion of your own. All the power to you: you are the boss of what you do with your wealth. (We seem to get all the business we deserve, and none that we don’t.) 

No matter where our resources land, remember that the markets go up and down. We won’t tell fairy tales about “minimizing risk” or getting market returns without enduring the inevitable fluctuations. We will not ignore that the price of so-called “safety” is often the loss of potential future gains. 

But we do believe in striving for long-term total returns. So we live with volatility. No waves, no voyage. No rain, no flowers. 

Clients, when you have questions about your situation, please write or call. If you know someone who would like to chat with us, let them know Second Opinion Season is in full swing, now through year-end! 

Thank you all, for everything. 

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Play the audio version of this post below:

It’s Second Look—and Second Opinion!—Season – 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/.

A Structural Reminder

pyramid

The ability to adapt to changing conditions is what sets those who thrive apart from those who merely survive.

Our portfolio theory evolves over time as economic and market conditions unfold. The problem with the textbook approach in a changing world is that a textbook, once printed, never changes. Looking at the world as it is and doing our own thinking, we see things in a new way.

Some time ago, we concluded that counterproductive monetary policies have distorted pricing for bonds and other income-producing investments. By crushing interest rates and yields to very low levels, the old investment textbook had been made obsolete.

Therefore the classic advice about the proper balance between stocks and bonds brings new and perhaps unrecognized risks, with corresponding pockets of opportunity elsewhere. Yet the classic advice met a need which still exists: how to accommodate varying needs for liquidity and tolerance of volatility.

Our adaptation to this new world is the portfolio structure you see above. Our classic research-driven portfolio methods live in the Long Term Core. We believe our fundamental principles are timeless, and make sense in all conditions.

But people need the use of their money to live their lives and do what they need to do. So a cash layer may be needed, tailored to individual circumstances.

The layer between is ballast. This refers to holdings that might be expected to fall and rise more slowly than the overall stock market. Ballast serves two purposes. It dampens volatility of the overall portfolio, thereby making it easier to live with. Ballast may serve as a source of funds for buying when the market seems to be low.

The client with higher cash needs or who desires lower volatility may use the same long term core as the one who wants maximum potential returns. One may want a ‘cash-ballast-long term core’ allocation of 10%-25%-65% and the next one 4%-0%-96%. It’s a free country, you can have it your way.

It may be time to review the structure of your portfolio. Clients, if you would like to talk about this or anything else, please email us or call us.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.