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S.M.A.R.T Investing

S.M.A.R.T. Investing Overview:

S.M.A.R.T. Investing stands for Simplified Macro Asset Reallocation Technique and is a proprietary, mathematical approach to retirement investment allocation and dynamic distribution planning. It is designed to provide a balance between the need for short-term retirement withdrawals and long-term investment performance. The unique approach of S.M.A.R.T. Investing provides peace of mind in up or down markets during the distribution phase of your retirement.

In order to avoid overdrawing your retirement funds during down markets, S.M.A.R.T. Investing aims to divide your retirement assets into four distinct categories: saved money, protected money, protected growth money, and growth money. Each of these categories and their purposes will be discussed in detail throughout this course.

Saved Money

Saved money is money we deposit into a financial institution (our client’s preferred bank or credit union). We intentionally sacrifice performance for liquidity, contract guarantees, and principal protection. We keep sufficient to meet our very short-term spending and emergency needs, but not so much that we are exposed to inflation or opportunity costs.

Protected Money

Protected money is money we lend to a financial institution for a period of time in exchange for contract guarantees and a volatility buffer. We sacrifice some liquidity for improved performance potential while retaining principal protection and contract guarantees.

Protected Growth Money

Protected growth money is money we invest in “the market” using asset managers that employ tactical strategies. With the philosophy of “winning by not losing” as their basis, these tactical managers select which investments and when to buy or sell them by monitoring key economic indicators. They adhere to disciplined strategies designed to minimize downside capture in declining markets.

Growth Money

Growth money is money we invest in “the market” using asset managers that follow a fundamental philosophy of due diligence at the individual company level. These managers analyze a company’s financial statements, balance sheet, P&L, P/E ratio and forecasted revenues to determine if there are growth or value opportunities that are not being priced correctly in the capital markets. Once they identify the right candidates, they buy those stocks and put them directly into your portfolio. When the markets decline, these managers don’t often react.

Making S.M.A.R.T. Investing Work for You

By strategically placing various amounts of your assets into the four S.M.A.R.T. Investing categories, we are able to achieve optimal performance while also balancing the demand for withdrawals to meet your retirement spending needs. When the need for withdrawals arises we are able to dynamically choose which accounts to draw from.

How we decide what amounts to allocate to each category and which managers to select within those categories varies greatly depending on the tax statuses of your accounts, your individual risk tolerance, market conditions, your retirement goals, and much more. We strongly suggest you meet with one of our advisors one-on-one to determine the strategy that is best for your situation.

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