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Since 1984 I have helped high net worth investors achieve their investment and wealth planning objectives. Of many lessons learned over the last 40 years, the saying of Wall Street, “It is time in the market, not market timing, that matters most,” continues to ring especially true. While this axiom may sound simple, it is often difficult for investors to apply. The emotional condition I call FUD (fear uncertainty and doubt) caused by investment market volatility can result in reactive decisions that take investors out of the market. My goal in this writing is to share some useful information and perspectives that are timely, relevant, and hopefully of value to you. Here are three proven planning techniques to help with wealth preservation.
Wealth Preservation Strategies in a Volatile Market
High net worth families face unique challenges in preserving their wealth. Navigating volatile investment markets in an ever-changing economic landscape is one of them. While recent stock market volatility has been relatively low since the current bull market began in October of 2022, history underscores the importance of implementing effective wealth preservation strategies. In my career as a Certified Financial Planner® and Certified Portfolio Manager® I have experienced several time-tested investment planning techniques that can effectively help preserve and increase the estate of high-net-worth families. Here are three proven ways to help safeguard your financial future.
1. Implement Tax-Efficient Strategies
Wealth preservation goes hand in hand with tax efficiency. High net worth families should leverage tax-advantaged accounts and strategies to minimize their tax burden. For example, utilizing Roth IRAs (and Roth Conversions), 529 plans for education costs, and charitable trusts can effectively reduce taxable income while promoting long-term financial goals. Moreover, maximizing deductions for charitable donations not only benefits your chosen causes but can also lower your overall tax liability. Because of the potential for higher taxes in 2026 if certain existing tax laws expire, I put this first on the list.
2. Explore Alternative Investments
In addition to traditional assets, high net worth families should consider alternative investments, which can serve as a buffer against volatility. Private equity, hedge funds, and real estate investments often have low correlations with stock market performance, providing opportunities for growth even during turbulent times. They also offer potential tax benefits that can enhance overall returns. However, these investments come with risks and usually require a longer investment horizon, so thorough due diligence is essential.
3. Maintain a Long-Term Perspective
Market volatility can trigger emotional responses that may lead to rash decisions. I have seen many smart people fall victim to this human condition. It’s crucial to maintain a long-term investment perspective, focusing on your financial goals rather than short-term price movements. An experienced advisor can provide guidance and help you stay committed to your strategic plan in volatile markets. Regular portfolio reviews can ensure alignment with your long-term objectives, allowing for adjustments when necessary, without succumbing to panic.
In summary, my short list and other proven strategies can serve you as a proven guide to protecting your assets. By diversifying your investments, exploring alternatives, implementing tax-efficient strategies, hedging against inflation, and maintaining a long-term perspective, you can preserve your wealth and position your family for future success.
Through 40 years as an investment advisor, John Gardner has gained valuable investment insight, experience, and knowledge. He and the team at Blackhawk Wealth Advisors have the certifications and qualifications you can trust to successfully guide you with your financial goals. Blackhawk Wealth Advisors employs a collaborative, multi-generational approach by using tax efficient and risk reducing investment strategies to maintain your current lifestyle while meeting your long-term needs and estate aspirations. Call us if we may be help.
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