In many ways, a good offense is the best defense, even for investors.  By keeping up on the information about your investments and finding investments that are the most competitive, you will keep a portfolio moving forward and seldom have to worry about taking backward steps.  However, economies always have adjustments that need to be considered, such as technologies becoming outmoded, new communications channels and devices that change traditional relationships for advertising, and new medical treatments and devises that eliminate certain problems, but may create new ones.  Guarding a portfolio can be a tricky thing, especially in the current climate of a credit crises and recession.

We wouldn’t think about having our home uninsured, but generally people keep their retirement 401K or IRA money unprotected.  Yet, there are ways to provide protection using call options and put options in ways that act like insurance.  Of course, this has a cost, just like it does when you insure a house or a car.  Determining how much one is willing to spend on insurance is a typical tradeoff decision. And safety of the asset is not all that needs protection.

Taxes can eat into the value of an investment because income and capital gains are taxed and estate taxes can also cut the value of investments nearly in half.  Protection from taxes comes primarily in the form of planning (see Tax Planning section).  By utilizing a multi-strategy approach, one increases the probability that funds will be retained for the purposes and legacy that the owner of the assets intended.  It is said that, “people don’t plan to fail, they fail to plan”.

We will be glad to discuss plans that range from option hedging, to asset allocation, the proper use of hedged funds, and the use of insurance strategies (we don’t sell insurance) that can fit into the investment and estate planning processes.  The right answers will need to take your particular circumstances into account.