While all investors want to see their assets grow, capital preservation and risk management take on extra importance when you reach a certain level of wealth. Your goals may include...maintaining your standard of living, providing for your family, generating income with minimal tax consequences, safeguarding your wealth against unexpected events. Capitol Securities Management can assist you when considering the following:
Asset Allocation
Asset allocation has been shown repeatedly to be the most important single determinant of overall investment performance – and risk. Choosing the right mix of asset classes also can reduce portfolio volatility significantly. We make asset allocation a key component of your investment strategy, selecting a mix of asset classes that reflects your specific financial objectives, time horizon and tolerance for risk.
Getting the right mix
The combination of investments you choose can be as important as your specific investments. The mix of various asset classes, such as stocks, bonds, and cash alternatives, accounts for most of the ups and downs of a portfolio's returns. There's another reason to think about the mix of investments in your portfolio. Each type of investment has specific strengths and weaknesses that enable it to play a specific role in your overall investing strategy. Some investments may be chosen for their growth potential. Others may provide regular income. Still others may offer safety or simply serve as a temporary place to park your money. And some investments even try to fill more than one role. Because you probably have multiple needs and desires, you need some combination of investment types. Balancing how much of each you should include is one of your most important tasks as an investor. That balance between growth, income, and safety is called your asset allocation. It doesn't guarantee a profit or insure against a loss, but it does help you manage the level and type of risks you face.
Insurance
Insurance can play a key role in protecting your wealth and providing for the ongoing needs of your family. We can help you determine the types and degree of insurance protection best suited to your specific requirements. Capitol Securities Management provides access to a full range of products, from disability and long-term care to term and permanent life insurance policies for both personal and business needs. Depending on your specific situation, insurance strategies may also provide you with tax and wealth transfer benefits.
If you are like most people, it is not that you don't appreciate the value of life insurance. In fact, many people believe they need more coverage. You probably would not mind owning additional life insurance. It's just that you don't want to buy it. Thinking about buying life insurance, talking about buying life insurance, discussing the reasons for buying life insurance--all of these discussions make many people feel uncomfortable.
Five reasons to buy life insurance
• To provide continuing income for your family members
• To pay off debts or to leave money for educational or wedding expenses
• To pay final expenses and taxes
• To provide an estate for your loved ones
• To leave money to charity
A Final Thought
Although you may not like the thought of planning for your family's future without you, it is the most important way to protect and provide for them. Unless you have substantial family wealth, buying life insurance is the best way you can help secure your family's financial future. And what could be better than knowing your loved ones will be protected, even if you are no longer around to take care of them?
Tax-Managed Investments
Taxes make a big difference. Let's assume two people have $5,000 to invest every year for a period of 30 years. One person invests in a tax-free account like a Roth 401(k) that earns 6% per year, and the other person invests in a taxable account that also earns 6% each year. Assuming a tax rate of 28%, in 30 years the tax-free account will be worth $395,291, while the taxable account will be worth $295,896. That's a difference of $99,395..
In addition, considering tax-advantaged investments such as municipal bonds and the tax impact of specific transactions can have a significant effect on what you pay and what you keep. Your advisor also can provide a custom analysis of all your investments – no matter where they are held – and help you structure a portfolio that reflects your specific tax profile.
*Content Courtesy or Forefield and Co.
