The 8-Spoked Wheel of Smart Investing
We’ve developed a custom investment process we call our “Eight-Spoked Wheel of Smart Investing”. We keep it simple to understand — so you know what we do, what to expect, and how we leverage advanced strategies to maximize your investment success.
The foundation of successful investing is a well-defined and personalized process. This prioritizes logic over emotion, uses proven investment principles, and emphasizes key factors that can impact your money's growth and risk.
Here at Lindenwood Financial, we’ve developed our own investment process we call our “Eight-Spoked Wheel of Smart Investing” that we personalize to you.
We keep it simple to understand — so you know what we do, what to expect, and how we leverage our knowledge and research to maximize your investment success.
1. Knowing You: Your Unique Investor Profile & Financial Plan
This first step is all about you and your financial blueprint. We consider your current situation, risk tolerance, and investment timeline as the first step in crafting your personalized strategy. We learn about your income, taxes, family, and future goals. Our comprehensive approach ensures your investment plan has a clear direction and aligns with your overall financial picture.
2. Big Picture: Economy & Market Assessment
Next, we zoom out to analyze the broader economic landscape. We consider things like inflation, interest rates, and the current economic cycle to understand how these factors might impact different investments. This helps us make informed decisions about potential returns and risks of various asset classes in your portfolio.
3. The Mix: Crafting Your Asset Allocation
Informed by your investor profile, financial plan, and our research, we design a customized asset allocation roadmap for your portfolio. This outlines your ideal mix of asset classes: cash, equities, fixed income, and potentially others. Because we take a holistic view of your finances, this broad perspective helps us craft a more appropriate asset allocation for you.
4. Picking the Right Investments
Within each asset class in your allocation, we carefully choose the investments that align with your risk tolerance, financial plan, and long-term goals. As an independent, fee-only fiduciary firm, we aren’t beholden to any products or financial companies, and we never earn commissions on the investments we select. This means we have the freedom to choose investments based on their merit, cost, and what’s truly in your best interests.
5. Smart Placement: Optimizing Asset Location
Taxes matter! After all, it’s the money you get to keep that counts, right? Here, we use a strategy called "asset location" to take advantage of different tax treatments for various investments and accounts. What this means is we’ll strategically place certain investments in your tax-deferred, taxable, or tax-free accounts with the purpose and goal of maximizing your after-tax returns.
6. Putting It All Together: Implementing Your Investment Plan
Once finalized, we carefully and precisely put your investment plan into action within your portfolio by making the appropriate trades in your accounts. At this time, if applicable, we also implement your custom plan for either contributing to your account(s) or taking distributions out.
7. Keeping an Eye on Things: Continuous Monitoring & Evaluation
Your portfolio is not static. We monitor its performance and evaluate your investments to ensure they remain aligned to your needs and goals. Market changes, new opportunities, or cost savings might prompt adjustments to your portfolio. Our strategy balances a long-term view grounded in established principles with the flexibility to make informed adjustments to your portfolio when necessary.
8. Staying on Track: Periodic Rebalancing
Over time, your portfolio's target allocation can shift due to market fluctuations. When a portfolio becomes imbalanced, it can become either too aggressive or too conservative in relation to your objectives and risk tolerance. So, we periodically rebalance your portfolio back to your desired risk and return preferences to stay on course.
Keeping Your Investment Wheel On Track
Smart investing is a continuous journey. It’s important to regularly review your financial goals, personal circumstances, and life changes against your investment plan. As your needs evolve or the market landscape shifts, we adjust your strategy accordingly to keep your “investment wheel” on track.
The investment world doesn’t have to be intimidating. In fact, we help you navigate it with confidence and clarity using our eight-spoked approach that leverages powerful, personalized strategies for your financial success.
