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Investment Guidance: Prudent and disciplined strategies for every stage of life

 

At Lamke Financial LLC, we develop effective investment strategies specifically suited to your situation and stage of life.  This includes your Wealth Building Working Years, the Years Leading Up to Retirement and your well-deserved Retirement Years.   

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Wealth Building Working Years

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Because time and the power of compounding are on your side in this stage of life, investing for growth is important.  It is also important to have a disciplined, long-term focus.  Taking into consideration your specific goals, circumstances and time horizons, investments should typically lean toward a diversified equity portfolio rather than fixed income.  To build a sufficient nest egg, it is important to the grow the money you have saved.  Historically, over long periods of time, investing in equities has represented the best strategy for achieving that goal.     

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Years Leading Up to Retirement

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In the years leading up to retirement, it is important to reduce risk and volatility in your investment portfolio.  This typically entails shifting some of your portfolio out of equities and into fixed income.  At this stage, it is also prudent to start building a retirement income floor portfolio which can be used to fund your basic spending needs during retirement.    

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Retirement Years

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While it is very important to have a competent financial advisor during the Wealth Building and Leading Up to Retirement years, it is crucial during the Retirement Years.  This stage is where a CPA, CFP® can add the most value.  Big financial mistakes and market volatility can be devastating to your financial future if your portfolio is not positioned properly.

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We can help you create a retirement income floor utilizing your retirement savings that will give you a dependable inflation resistant income stream throughout your retirement, similar to your working years paycheck.  This is done primarily through the use of individually maturing government bonds, a diversified portfolio of income producing stocks, combined with other equities for growth and a further hedge against inflation.  Additionally, we will help advise you with the complexities of your other retirement income scenarios, including:

• Social Security claiming strategies

• Deferred compensation distributions

• Lump sum vs. annuity pension analysis 

• IRA Required Minimum Distributions (RMDs)

• Roth Conversion strategies 

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Our Basic Investment Portfolio Approach

Your investment portfolio needs to correlate with your comprehensive financial plan.

We need to understand your goals and the time horizon for achieving them.  Only after that takes place should your investment plan be developed.  Your asset allocation and investment selection should be based upon your financial goals and risk tolerance.  It should be a long-term consistent approach, not based upon the latest fad or what the markets are currently experiencing.  We do not believe in trying to time the markets.  Creating an investment strategy based upon a long-term view, with possible adjustments based upon your financial goals is our fundamental principle.

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Use the right types of investments to maximize success

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We adhere to a passive investment style for the majority of the equity portion of the portfolio.  This includes investments such as Fidelity and Vanguard index funds and Exchange Traded Funds (ETFs).  We may recommend actively managed mutual funds with outstanding long-term track records and the development of a diversified portfolio of dividend stocks for income and growth during your Retirement Years.

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For the fixed income component of the portfolio, we typically use government bonds, structured to be held to maturity.  This approach, which depends on the portfolio size, greatly reduces credit risk and interest rate risks that could result in losses.  Bond ETFs and index funds may also be used, as well as CDs and money market funds for short term cash needs.

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Keep investment expenses to a minimum

Every dollar saved in investment expenses is a dollar that goes toward achieving your financial goals.  Passive investments, if selected wisely, have low costs.  Properly selected no load and low load mutual funds can also have relatively low costs.  A diversified portfolio of dividend stocks can also be very low cost if they are held for the long-term and trading is kept to a minimum. 

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Pay attention to the effect of taxes

Tax efficiency is very important to your net investment returns.  Similar to investment expenses, every dollar you pay in taxes is a dollar that you do not have to help you reach your financial goals.  Certain investments can have different tax implications.  Some are taxed at different rates and others may not be taxed at all. This is where the knowledge of an experienced CPA can be particularly beneficial.