Monument Resource Center

Our clients hire us because they recognize the value of our Team’s unique, straight-forward, unfiltered opinion and our tailored advice designed to answer their questions, not everyone else’s. Below, you’ll find some of the most important questions we have been asked over the years to help you better understand the role we play and the advice we give.

The 3 Mistakes You’re Making With Your Investment Objectives

Your investment objectives steer your whole investment strategy, yet many investors don’t give them a second thought. It’s important to take a step back, evaluate how your objectives align with your investment time horizons for when you’ll need your funds, and then make the needed changes so you can actually reach your investment goals.

Mistake #1: “I want to be rich” is not an objective.

An objective is a specific goal and like the actions you take when you want to reach a personal objective (like figuring out a daily workout routine for when you want to lose weight), money should be a means in order to achieve both long-term or short-term goals. And when it comes down to brass tacks, long-term money (like the kind you use during retirement) is invested quite differently when compared to short-term money (like the kind when you’re renovating your house). When you’re stating your objectives, they must be able to accommodate both long-term and short-term money scenarios. Which is why “I want to be rich” really isn’t going to cut it.

The meaning of “rich” truly depends on each person’s own perception. To set a realistic objective, you’ll need to get into the real details of what being wealthy means to you and then determine how to get there. For example, do you simply want to be able to continue to live your life comfortably throughout retirement or do you want to be able to pass on your wealth to future generations? Once you determine what “rich” means to you, you can begin gearing your investment objectives to reach that goal.

Mistake #2: Taking on too much risk.

They say in order to win big, you need to bet big…but gambling mustn’t be confused with investing. Betting too big with your investments would be, for example, taking on an asset allocation that’s too aggressive or choosing to invest in esoteric, illiquid, or leveraged investments. Taking unnecessary risk with your hard-earned money is often not worth the potential reward. When thinking about your investment objectives, don’t go with the “risk it all” mentality. Instead, build your portfolio to take advantage of high probabilities of success over time. The historical odds of making money in the S&P 500 over one day is 52%, roughly 68% in one-year periods, 88% in 10-year periods, and 100% in 25-year periods. Anything that keeps you in the game has a quantifiable advantage. Set your investment objectives to align with your life goals and remember, never risk what you have and need for what you don’t have and don’t need.

If a portfolio is too aggressive, an investor also runs the risk of panicking during a protracted drawdown or sudden volatility. Consider it this way…if you felt the emotions were high when you were making the investments in the first place, odds are the feelings might return ten-fold when you get scared to lose it all. Rule of thumb: Objectives have to match both the use of the money and temperament of the investor.

Mistake #3: Failing to strategize.

While setting an objective that matches both time and temperament is important, asset location is critical to success as well. That’s why investors should align objectives to structures. For example, when saving for retirement, maximizing tax-deferred accounts first is critical to long term success. By doing this, you remove the long-term headwind of taxes and allow earnings to compound tax-deferred over many years. And here at Monument, we sure do love an efficient tax strategy.

Just as important as maximizing tax-deferred accounts for long-term goals like retirement, regularly investing outside of a retirement account can give you flexibility when it comes to goals that may be shorter-term in nature and provide more control over your tax picture in the future. If you only save in tax-deferred accounts, you may inadvertently have higher taxable income in the future than you planned for. Supplementing tax-deferred accounts with a taxable portfolio (which is taxed at advantageous capital gains rates under current tax laws when assets are sold) may reduce your overall tax bill and provide a source of funds to tap into before age 59 ½ .

Avoid the mistakes altogether.

Your investment objectives are arguably one of the most important components to your overall financial strategy, as they will determine the type of investments that are within your best interest.

Having too vague of a goal or misunderstanding the importance of planning it out can be detrimental to your portfolio. But you may not realize it until it’s too late. So why not eliminate the possibility of making a wrong move now? Monument Wealth Management is waiting with a stable shoulder to lean on.

Our Private Wealth Design is a collaborative, creative, and customized approach to turning your ideas and goals into a blueprint that represents the life you want to live and a realistic path to get you there. Our seasoned pros don’t waste your time with technical (and frankly boring) jargon–we’re honest and straight-forward. Our only objective is to lead you to financial freedom and have you living the lifestyle you want. If you’re ready to make a plan and feel confident in your investments, give us a call.

Oh, and dogs are always welcome.

High Earners Eye Retirement

It’s time to find clarity around your finances and remove the anxiety of the unknown.

Read our case study, “High Earners Eye Retirement,” to see how we helped one of our clients with their wealth planning.


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