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You Still Need to Plan

Knowing your future goals and putting them down on paper is crucial to achieving success. The first step is to establish or review financial and personal goals.

Set investment objectives

A grandfather and grandchild walking in the water at a beach.

A long-term investment focus should drive objectives and periodic adjustments. If needed, strategic moves should be made on the margins but not to the core portfolio. The rate of return and variability are a function of a portfolio’s investment mix. The optimal mix depends on individual goals and timelines. A person who has a goal of a $100,000 annual retirement income may need to take more risk, while a person with a low risk tolerance may need to adjust the annual retirement income goal to balance the lower risk tolerance.

Perform simulations to gauge impact

While the goal is to achieve the highest probability of success with the least amount of risk, don’t overestimate your appetite for risk. Knowing your tolerance threshold is important to create an optimal investment mix. Performance modeling can gauge risk and uncertainty based on inputs, such as personal goals, resources and investments that are run through market scenarios. The process removes emotional noise to support logical decisions.

Stay financially fit

At the end of the day, personal financial health is similar to an exercise routine. The goal is to create a healthy and sustainable approach that creates upside benefit.

Notices & Disclosures
Article is adapted from content provided by DTS.

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