Wealth Management & Preservation Strategies: Next Steps by LPL Financial Advisor Joseph Krier CFP®

www.krierwealthmanagement.com

Take all your money in the form of small bills, put it in a coffee can and bury it in the back yard. Be sure to go deep enough so Fido doesn´t find it…

Many investors are feeling this way as the markets continue their unpredictable swings and the Federal Government alters the landscape in an effort to deal with economic instability. Fear not, there is a better way. Preserving your wealth should be the primary concern whether you are a millionaire or a ´thousandaire´ or whether you are 40 or 80.

A variation of the Fido strategy isn´t a bad place to start. Not small bills and coffee cans, but bank and money market accounts. If you are absolutely averse to risk, there is no point in owning anything other than CD´s and money market accounts. Make sure you are earning something on your money. Too many banks are making a fortune from people sitting on large balances in low or no interest savings accounts. They use your money to lend to your neighbor at 4, 5, 6% or higher and simply keep the difference. It is well worth the visit to the local branch to see if you can get an extra couple %. CD´s are FDIC insured and offer a fixed rate of return. CD´s that are sold prior to maturity in the secondary market are subject to market fluctuation, so that upon sale an investor may receive more or less than their original investment.

If your risk tolerance is slightly higher you can venture into the short term bond market. Government bonds and Treasury Bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.

Taking this a step further, if you are ultra conservative, yet you believe in the growth potential of the stock market, consider taking a portion of your wealth and invest it with a few rules. 1) Don´t bet the farm – only invest a percentage of our assets that is suitable for your risk tolerance. 2) Look for senior sage money managers – ones with extensive experience and have some skin in the game. I like money managers who have an ownership interest in their company. Managers who are compensated based on performance relative to market indices may not be a good fit. Sometimes this forces them to be more aggressive than they should be.

A key strategy for the ´growth´ portion of your portfolio is a ´sell strategy.´ This is a process of determining your maximum allowable loss from a given investment and giving hard sell instructions. The key to predetermining the selling point is that, when the time comes, there is no second guessing, the sale is made. For some people this might be 5% of their portfolio; for others it is 25%. Regardless, having a sell strategy in place beforehand removes the emotion from the transaction and aims to minimize loss.

There are a host of Wealth Preservation strategies involving legal documents as well as various types of insurance. Those will be discussed in upcoming articles. Stay tuned.

www.krierwealthmanagement.com

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult a financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. No investment strategy ensures success.

Joe Krier is President of Krier Wealth Management, a firm with financial consultants registered in 23 states, providing asset management services and estate management services as a Certified Financial Planner, and can be reached at 904-296-8138. Securities and Advisory Services offered through LPL Financial Member FINRA/SIPC.