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25 Years in Review: The Evolution of My Investing Philosophy

Nov 17

25 Years in Review: The Evolution of My Investing Philosophy

The Evolution of My Investing Philosophy

When I first started out as a financial advisor back in 1992, times were different. First of all, it was a really bad fashion decade…think baggy suits. Haha! Anyway, I digress.

The Dow Jones was at 3233; we were well off the lows of the September 1990 correction of 14% and of course the 33% correction of October 1987. Little did I know at the time that we would enjoy one of the best bull markets of history, rising to 10876 (+256%) by November 1999.

Allocation models were simple; for the most part, the model was 80% Equities/20% Fixed Income. If we were not earning 20% per year there was something wrong…

Flash forward to today, and though client’s goals, objectives, and risk tolerance drive the allocation, our moderate growth allocation looks pretty similar to this:

  • 35% Global Equities
  • 30% Real Assets
    • Real Estate
    • Natural Resources
    • Global Infrastructure
    • Commodities
  • 20% Fixed Income
  • 15% Alternative Investments
    • Reinsurance
    • Life Settlements
    • Managed Futures
    • Absolute Return Funds

When I create retirement strategies for my clients, there are four factors I focus on:

  1. Client’s retirement goals: What age they would like to retire at or what year?
  2. Client’s risk profile: For example, do they lose sleep over the thought of loss of principal?
  3. Client’s current lifestyle vs. desired retirement lifestyle: Will there be more travel, hobbies (like golf), etc.? The ‘old rule’ was to use 80% of pre-retirement expenses, but today people are much more active and traveling so we are actually calculating with 100-110% of pre-retirement expenses.
  4. Current economics:For the last 35 years, interest rates have been falling, causing Bond values to increase, thereby making Bonds a natural choice for a majority of retirees’ portfolios. Today, interest rates are at all-time lows but WILL eventually rise, causing value of bonds to decrease. That has caused us wealth advisors to seek other areas of income. This is where ‘Alternative Investments’and ‘Real Assets’ come into play (as per above).

Other factors have changed retirement overall, which have, in turn, affected my investing philosophy:

  • Decrease in pensions—the reliance on company funded pensions are a thing of the past. This requires me as a wealth advisor to advise clients to practice one of the most basic principles of wealth accumulation…”Pay yourself first”. Whenever possible, use Defined Contribution Plans (401k, SIMPLE IRA, SEP-IRA) to save for your future with tax deferred, tax deductible dollars.
  • People are retiring later in life—but also living longer. The net/net of it is that we have longer retirements to plan for. Years in retirement, expenses, and inflation are all key factors.
  • Today’s economy – the economy is a big factor in what drives our investment models. The percentage that we allocate to Global Equities, Real Assets, Fixed Income and Alternatives is driven in large part by the current economy as well as what we see for the potential future economy.
  • Increasing health care costs – Health care costs expensed during retirement are one of the biggest factors in retirement planning; rising health care costs can have a big impact on that.

One thing that doesn’t change as the years go by is my approach. Our job as wealth advisors is to evaluate the circumstances, trust our models, and stick to the course. I make sure to keep an investment strategy in front of my clients and make sure accounts are properly allocated and rebalanced as needed.

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Bart A Zandbergen, CFP® is a Registered Investment Advisor with Optivest, Inc and a Registered Representative with Gramercy Securities, Inc. Investment advisory services are offered by Optivest, Inc. under SEC Registration and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC, 3949 Old Post Road, Charlestown, RI, 02813, 800-333-7450.


Investment advisory services are offered by Optivest, Inc. and securities are offered through Gramercy Securities, Inc., member FINRA & SIPC. Securities are not FDIC-Insured, are not bank-guaranteed and may lose value. This website is provided solely for Optivest, Inc. clients and does not intend to provide investment, tax or legal advice. Be sure to consult with your own tax and legal advisors before taking any action that would have tax consequences. All references to Optivest on this website refer to Optivest, Inc. (a California Incorporated company) and all references to Optivest Properties refer to Optivest Properties, LLC. Optivest, Inc. does not represent that the securities, products, or services discussed in this website are suitable or appropriate for all investors. Information herein is taken from sources deemed reliable and neither Optivest, Inc. nor Gramercy Securities, Inc. is responsible for any errors that might occur. Optivest, Inc. may only transact business in those states and international jurisdictions where we are registered/filed notice or otherwise excluded or exempted from registration requirements. The information on this website is not intended for distribution to, or use by, any entity or person in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject Optivest, Inc. or Gramercy Securities to any registration requirement within such jurisdiction or country. The opinions expressed by vendors or third parties are those of the author(s) and are not necessarily those of Optivest, Gramercy or their affiliates. All links to other Internet websites (“hyperlinks”) are included as a convenience for our visitors and Optivest, Inc. assumes no liability for the content or the presentation of such linked sites. No part of this website may be reproduced in any form, or referred to in any other print or electronic publication without the express consent of Optivest, Inc. The material has been prepared and is distributed solely for information purposes and is not a solicitation or an offer to buy or sell any security or instrument or to participate in any trading strategy. No representation or warranty is provided for any software that may be downloaded from this website. Copyright © 2016 Optivest, Inc.

Securities offered through Gramercy Securities, Inc., 3949 Old Post Road, Charlestown, RI 02813, 1-800-333-7450

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