Our Quadrant Advantage™ approach to investing deals with the concept of having all areas of potential income covered. Warren Buffet said, “To invest successfully over a lifetime does not require stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework”
The Strategic portion of the Quadrant Advantage™ is a passive buy and hold program. The best stocks, bonds, mutual funds are chosen for the long term. This strategy works extremely well during a secular Bull cycle. During a Bear or Neutral market it will do poorly.
The Tactical portion of your portfolio allows you to make allocation changes to take advantage of current market trends. Tactical money managers will invest in similar assets as strategic money managers but for different reasons. This approach has shown to work very well during periods of neutral markets.
The Absolute Return portion of our Quadrant Advantage™ utilizes financial products that generate predictable returns with having minimal risk. These products would include CDs, bonds, fixed annuities, savings accounts, money market funds and non-traded real estate. We split this program into two areas: (1) emergency account and (2) inflation hedge. We recommend having between 6 months to 1 year’s worth of expenses in the emergency account at any time. The hedge to inflation strategy includes illiquid investments. We recommend that no more than 10% of a client’s total investable assets be placed in these hedging programs.
The Guaranteed Income section is your “sleep at night” quadrant. This is used to cover your CORE expense like food, shelter, transportation, healthcare and clothing. For the majority of people, this section is only covered by Social Security Income. Pensions and annuities are the only two other guaranteed income programs. If it is determined that your Social Security plus your pension do not cover your CORE expenses, then the difference is derived from investing in a type of annuity that guarantees income for 1 or 2 lives.
For more information about this service, or to make an appointment to discuss your future plans call Best Times Financial Planning today!
*Guarantees are based upon the claims paying ability of the issuing company. Diversification through an asset allocation plan is a useful technique that can help reduce overall portfolio risk and volatility. Diversification neither ensures a profit nor protects against a loss. Diversification offers returns which are not directly related over time and is intended for the structure of a whole portfolio to help reduce the risk inherent in a particular security.