Understanding and Mitigating Investment Risk
Understanding and mitigating investment risk is an important part of working toward your financial objectives. How this is achieved: The approach is specific to each client.
Effective risk-management planning can help provide context around questions such as
- Am I on track to have the option of not working at some future time?
- Am I taking appropriate steps to understand the potential impact of taxes on my overall strategy?
- Could I have more time for my family by having a financial advisor assisting with my personal finances, retirement and tax planning strategies?
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That is often a function of your comfort level and personal goals. KWM Wealth Advisory’s process helps you establish “Your Number,” which in turn can help identify the trade-offs between your priorities. Managing and reviewing your financial resources effectively is increasingly important in an environment where taxes, inflation and inadequate planning may contribute to uncertainty.
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- Addressing Investment Risk – Risk management strategies are designed to help manage the potential impact of market volatility, loss of principal or erosion of purchasing power due to inflation.
- Estate planning considerations –Assets and estates can be affected by various external factors, such as the death of a loved one, disability or illness, or property loss or damage. The financial impact of these forces can potentially be managed with thoughtful estate planning strategies.
- Preserving your legacy – When a loved one dies, his or her legacy (the assets created during a lifetime) must be thoughtfully addressed. Estate planning strategies are designed to help ensure that their loved ones move forward as expeditiously and efficiently as possible in accordance with individual goals and circumstances.
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There is a thoughtful way to plan for your children’s or grandchildren’s college education. Working closely with you, KWM helps develop a systematic plan of saving and investing. A variety of factors are taken into account, including:
- The degree of control you want over the college fund and how it may be spent
- The potential impact of your planning on financial aid considerations
- Striving to ensure income tax implications are clarified before they impact your plans
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If you are not there to help prepare your family, planning often involves more than just replacing wages. Ultimately, it’s about the future – addressing current and future financial obligations, potential future education funding and retirement needs of the survivors. A life insurance needs analysis can help estimate how much coverage may be appropriate to help address your family’s financial needs.
It is important to review disability income planning resources in the event your ability to earn income is compromised.
KWM can help you plan toward being financially prepared. An acceptable level of liability insurance and health insurance can help address potential risks that may otherwise impact your existing asset base or require the use of earned income for unexpected events.
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Adequate homeowner’s insurance can make all the difference in handling a crisis. Effective risk mitigation takes into account the replacement value of your home, vacation property, furnishings and other such assets. In addition, the appropriate level of automobile insurance may protect you from a major property loss as a result of accident or theft.
