Lessons From The COVID-19 Pandemic
The last year and half has presented a unique set of challenges that many of us never expected. The pandemic and its effects on how we live and work have required us to pivot in a number of ways, including how individuals manage their wealth. While our Entrust Wealth Partners team is regularly assessing and optimizing our clients’ plans based on outside factors, such as those recently experienced, we wanted to share three important lessons from the COVID-19 pandemic shaping wealth management practices.
Mitigate Risk Around Unplanned Events
Emergencies happen. Unexpected challenges occur. Diversifying your investments is an important way to mitigate risk around unplanned events. And, in addition to potentially reducing risk, a diverse portfolio may present a better chance at generating dividends.
In general, a diverse portfolio optimized to reduce risk may include domestic stocks, international stocks, bonds, and money market investments. The key is to find the right balance between risk and stability based on your unique investment goals. Get clear on your own personal risk tolerance and plan to adjust your portfolio accordingly.
Additionally, it is important to have a clear plan in place should you or a family member be directly affected by an unplanned event such as job loss, illness, or loss of life. Considerations include ensuring your personal and business insurance coverage is adequate, having a wealth transfer plan established, and preparing a business succession or exit plan.
Check-In on Your Plan Frequently to Address Personal and Professional Changes
Each year, you undergo a series of personal and professional changes. Some are big while others may be barely noticeable. However, all of these changes have the potential to impact the success of your wealth management plan. By regularly reviewing your strategy, allocations, beneficiaries, and other important details, you can determine if you are still on track towards your goals and, if not, make adjustments as needed.
One of the things we do at Entrust is partner with our clients to “stress test” their strategies and plans to ensure they reflect recent personal and professional changes and are aligned with the individuals’ short-term and long-term goals. While check-ups multiple times a year are recommended, it is important to notify your advisor of any changes (no matter how big or how small) as soon as they occur so the proper steps can be taken in an effort to optimize your wealth management plan.
Seek Professional Support to Help You Navigate the Changing Landscape
Working with a wealth management professional can offer many benefits, especially during times of change or uncertainty. In many cases, your financial advisor will recommend appropriate adjustments to your investments before they are significantly impacted by market or economic events. In other cases, a wealth management professional can help you avoid impulse decisions or reactions and, instead, work with you to assess whether or not taking action is right for you and your individual goals.
Protecting and growing your wealth can be a stressful and emotional experience - not only for you, but for your family members and business partners as well. Having a team of trusted advisors that can guide you through an evolving landscape will help you to understand the bigger picture, assess your individual risk, and remain confident in your plan forward.
Entrust Wealth Partners regularly monitors and assesses our clients’ plans and portfolios to help them navigate change. However, if you have questions or concerns, including recent work or life updates, which you’d like to discuss ahead of your next touchpoint, please contact your advisor to schedule a time to meet and discuss your needs.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.