Legendary Strategies

A Sure Thing

Make sure a sizable portion of your portfolio is in guaranteed income. Yes, I know, the dirty word of the year is Annuities; and just like the dirty word of Moderate in politics, many people shut down and stop listening when that word is uttered. However, there are several great annuities out there designed specifically for the older generation in mind – with great add-ons like guaranteed step-ups regardless of market volatility, legacy Death Benefits of what you originally put into the annuity even after you’ve spent the balance down to $0.01, and guaranteed income for the life of you and your spouse regardless of the account balance. Think of it like this, if you had a magic putter that guaranteed you’d make at least par on every hole you used it on, wouldn’t you use it on the majority of the course?

I Can Clear Those Trees

Just like Tiger Woods making an amazing shot that clears the trees in the middle of the fairway, making a great trade can earn you a spotlight for a few seconds amongst your friends and colleagues – everyone will want to know how you scored such a great play and what you plan on doing next. However there is inherent risk in constantly chasing the high profile returns. Part of the fun in chasing high-risk areas in Southeastern Asia Emerging Market Debts, challenging swings, or Celebrities is losing everything you put into it. Sure you may hit one big one, but think of all the work that had to go into that trade, and the likelihood of that happening again is slim to none. Look at what Vanguard has put out for the next 5 year expectancy for the market. They are endorsing the 60/40 portfolio of bonds to stocks – and that’s for the average investor whose age is in their mid 40’s. This means Vanguard is setting the expected standard return at 4-6% for the next 5 years in the market. Talk about hitting it into the rough! Understand that you can take some risks, but you need to make sure the majority of your strategy is set on tested and proven institutions. As every great golfer has said – get back to the basics.

Read the Green

Math and Money are two entirely separate things. If you have $100 and it decreases by 50%, you have $50. Let’s say it increases by 50% next year. On paper, you have an average return of 0% (down 50% + up 50% = 0% gain). However, in reality your portfolio is down $25 since a 50% increase on $50 is only an additional $25. I think Money and Golf are much more in tune with one-another – chiefly because it comes down to the end of the play that can make or break a great streak. Being able to read the greens and interpret the subtle angles, rises and falls, banks and ridges, and on top of all that, measure the amount of pressure to use when swinging to take advantage of every geographical anomaly, is crucial to just score Par. The same can be said for money and the markets. Being able to judge when to take your distribution, when to close your positions, what to diversify into, when and how to correct and re-balance your portfolio’s make-up, what to liquidate, and on top of all this, take Taxes into account, one can begin to see the allure of trying a simpler task, like building a space shuttle with coconuts and twine #McGuiverStyle. Think of your retirement and investing like climbing a mountain. Everyone is focused on getting to the top, but the most number of deaths that happen occur while coming down. Have as good of a plan coming down as you do going up. Know where your income will come from, what streams you can rely on when the market is volatile, what investments you want to keep long term and short term, and chiefly what amount of profit you will accept and then CLOSE YOUR POSITION. As the old saying goes, pigs get fat, hogs get slaughtered.

If you can combine all three of these practices by ensuring you have 1) a significant portion of your strategy in guaranteed income to stabilize any potential mis-step at the end of your game, 2) building a diverse and strategic portfolio, and 3) having an exit strategy, then your game will be on par with that of Jack Nickalus and Bobby Jones – Legendary.  Contact me for more information: Harrison Lance [email protected]