Brighter Days Ahead; Plan Now

Has your emotional outlook improved over the past month or so? Are you looking forward to what we perceive as ‘normal,’ and beginning to realize that life and activities around you have slowly begun to emerge from the depths of our pandemic lockdowns? I, for one, am very optimistic that a brighter future is in store for all of us…and this is not based on some political ideology or change that occurred during this period. My optimism has everything to do with us gaining control of the pandemic and being an active participant of a re-energized economy and the ensuing celebratory mood civilization will capitalize on.

To keep any forward looking (post-pandemic planning) jubilance in check, I want to highlight two subjects that require critical decision making when implementing them into a plan regardless of the economy or societal sentiment: Risk vs. reward, and life insurance.

Risk vs. Reward–

With each and every client account under management, we, at Arktos Wealth Management, start with a discussion to clarify the purpose of that particular investment. The purpose could be saving for the purchase of a first or second home, a retirement savings or income plan, a new car, or just a rainy day fund. It could also be to preserve decades of accumulated family wealth for an efficient transfer to the next generation with minimal tax implications. Or, it could even serve as a function to provide annual cash gifts to ensure benefits are payable to a charitably inclined organization in need throughout, or even after, one’s life.

Investing for any of these purposes obviously presents different timelines. Different timelines necessitate taking different investment risks. For short-term goals, risk could be defined as “taking no risk of loss.” For longer term goals like funding a retirement plan that is several decades away, and will need to last several decades beyond that, we might be willing to assume 20-30% annual swings valuation…both up, and down! So how does risk and reward work in investment terms?

One way to reduce the amount of risk, or volatility, in your portfolio is diversification of your investments. In other words, “don’t put all your eggs in one basket.” Here’s a short video explaining risk vs. reward in greater detail.

Life Insurance–

Everyone has heard about life insurance and knows the basic principal; it pays a benefit if someone dies. While that one aspect is true, it can be an extremely important and complex planning tool when integrated into a family’s or business’s financial plan.

Life insurance is the ultimate financial leveraging tool for when human mortality occurs. And while the public is bombarded with advertising from insurance companies on a daily basis, there is still a great number of the population that is uninsured…leaving surviving family members on a potential path of destitution or financial ruin. Please take a short moment to refresh yourself with the concept and uses of life insurance.

If you have questions concerning your particular goals,how risk and reward affect your investments, or how and if a life insurance would play a factor in you achieving your goals, give us a call. We love to talk about solutions to benefit our clients!

You can reach Frank directly at (818) 249-4984.