This week on the broadcast, (listen here) Doug says investors must define their investment objectives before anything else. The exercise of goal setting is simple, but here’s a game plan to get you started:
Come up with some rate-of-return targets (looking at your portfolio, what rate of return would you be satisfied with?) and decide how much you are willing to lose (maybe you don’t want a draw down of more than 5%, for example.) Doug has talked with enough clients over the years to know that capitol preservation is one of your highest priorities—he understands that you don’t want to suffer any significant losses—but he thinks it is important to quantify that goal. Decide on a number that you know is the most you can live with on the negative spectrum—write down something specific. It will help you in selecting your investing vehicles.
Doug’s second point of discussion is the inventory of your assets. In one-on-one conversations with clients, he splits assets into three categories:
- Liquid assets (i.e. taxables assets; assets outside of your IRA.)
- Retirement assets (including income streams such as penchant plans or social security.)
- Property assets (vacation homes, real estate, land, etc.)
The last point is your legacy game plan. Make sure your paperwork is in good order, you have named an executor for your will and that your spouse, children and grandchildren are taken care of.
Could you use some advice or clarification on any of these points? Send an e-mail to askdoug(at)dougfabian(dot)com. If you would like to set up a personal consultation with Doug you can do so by calling 888-300-3684.