Efficiency is to a portfolio what training is to an athlete. It enhances the performance, it
expands the opportunities, and eliminates the uncertainty. You can help create efficiency in
your portfolio by:
Modeling long-term projections. A projection allows you to see the future results of decisions
made today based on current variables. As your variables change so will your results. Running multiple projections over time may allow you to stay on track towards the accomplishment of your financial goals. A projection enables you to see areas of weakness in your current financial decisions. Being aware of these areas of sensitivity allows you to make wholesale changes or smaller tweaks as they are needed. Finally, projections allow you to compare several “what if” scenarios to further fine-tune your financial choices. Projecting the result of long-term scenarios is invaluable to establishing a feeling of confidence, accuracy, satisfaction, and expectation in your current financial decisions.
{All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Historical and current performance is not a guarantee of future results or returns on investments.}
Leaning into available tax strategies. Taxes are one of the biggest obstacles challenging progress toward your unique “money vision,” but the ability to save on taxes can put you ahead of the game. There are three ways to lean into tax strategies. First, you should review your prior year’s tax return. Understanding the elements in your portfolio that create tax liabilities is the first step toward identifying the strategies that can reduce them. Secondly, you should research tax optimization strategies. Roth IRAs are just one of the possible ways to add tax-free assets to your portfolio. Thirdly, partnering with an Advisor with tax acumen may be an effective way to optimize these strategies in your portfolio.
Optimizing the value of employee benefits. In addition to your own personal savings, employee benefits are a critical part of your savings toward your long-term “money vision.” Employee benefits include health, disability, and life insurance policies, Health Savings accounts, Dependent Care Flexible Spending accounts, and more. Of primary importance are the employer 401 accounts. Several things should be considered when utilizing these. First, matching is an important aspect. If there is no matching available, you should carefully consider other investment options. Secondly, asset allocation should be carefully researched. Many of these accounts offer Target Dated funds which may or may not be best for optimizing the benefit. Thirdly, some of these accounts provide for a self-directed option which would allow you to use a third-party source for account allocations and in many cases, this would expand the investment opportunities available. Again, utilizing an Advisor with a strong fund specialty is an excellent way to optimize the value of these accounts.
At R&R Financial Advisors, we are helping young professionals create efficiency in their portfolios by modeling projections, leaning into tax strategies, and optimizing the value of employee benefits.
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Investment advisory services offered through Brookstone Wealth Advisors, LLC (BWA), a registered investment advisor. BWA and Brookstone Capital Management, LLC are affiliated companies. BWA and R&R Financial Advisors, LLC are independent of each other. Insurance products and services are not offered through BWA but are offered and sold through individually licensed and appointed agents.
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