With a majority of our clients near retirement or well into retirement, our investment strategies have always been to try and bring as much certainty as possible into our portfolios. A few examples would be: investing in shorter duration fixed income to lower volatility, increasing cash flow by diversifying into various sectors of income securities, broad equity allocation to reduce risk, and utilizing individual bonds in some portfolios to better predict returns.
However, one thing we don’t want is for our “decisions” to become “guesses.” Munis or corporates? Dividend stocks or bonds? Take more cash flow from the IRA or from the taxable account? Take gains now or later?
No one knows what the exact outcome will be with regards to tax consequences on January 1st (see previous blog). Any decision at this time to change strategies would be based on guesses and hunches. At Windsor, we continually focus on the “net net” of what ends up in our client’s pocket. We understand decision making always involves a degree of uncertainty, however, as the clouds of uncertainty lift over the coming weeks, we will make prudent decisions to ensure our portfolios continue to operate as efficiently as possible.