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7 reasons to be glad you chose goals-based investing

When the market is erratic, people worry.

About maintaining their lifestyle. Or continuing to make an impact in their community. Or whether they need to reconsider their retirement plans. But imagine you chose goal-directed investing; you’d already be doing exactly what you should during periods of volatility.

So, if the worriers asked, “Why so calm?” you could sit back, smile and give them these seven reasons.

1. Goal-directed focuses on “Am I on track with my goals?” instead of “Did I beat the benchmark?”

What good is beating a benchmark if you still can’t achieve your goals? Participating in our specialized Discovery process includes identifying your goals and setting priorities for each one separately, based on when you want to achieve them.

2. “Risk” is your definition of how much loss is OK—and you decide what is OK for each goal.

With the help of our team, you select strategies that align specifically with each of your goals. Some longer-term goals can manage greater risk. Some shorter-term goals—not so much. But the beauty is, it’s always up to you.

3. “Goal risk” is easier to wrap your head around than “total portfolio risk.”

Taking what we learned during discovery, you’ve split your pool of money into specific goals, each with its own level of acceptable risk, and each managed to mitigate that risk. If you still had just one portfolio, however, it would be confusing to figure out how the market cycles will affect your lifestyle, philanthropy or saving for children’s education pools.

4. Designed and seeks to provide you with consistent performance and risk-adjusted return.

You’ve set your maximum drawdown, so while your peers are sweating the cycles, you have a team focused on your comfort level

5. A smart strategy to help mitigate common financial biases (the ones that can cause irrational decision-making.)

Remember when your parents asked you, “If everyone jumped off a bridge, would you do it too?” Investing is also prone to the pitfalls of herd mentality. You’ve built goals beyond generalities – not just “retirement” but “retirement at age 60 with $X.” So whatever everyone else is doing doesn’t matter. You can take pride (and some reassurance) that behavioral and financial biases are for other people — because your portfolios are professionally managed. All of us with eyes on the same, specific-to-you prize.

6. Let’s hear it for active management.

And three cheers for disciplined investment processes. They matter when markets are volatile.  All this in an effort to enhance consistency and potentially lower volatility.

7. Tax management isn’t just a November/December thing anymore.

If you choose goal-directed, you know that we harvest tax losses year-round in an effort to net greater savings. The benefits of  tax management provides can be even greater in a volatile market.

Comforting news worth sharing

It’s natural to worry when the market’s not so stable. Did you choose a goal-directed path to be confident in this moment? If not, we have a team who would work tirelessly to keep you on track, no matter the market’s mood.

Legal disclaimer:

SEI Private Wealth Management is an umbrella name for various wealth services provided through SEI Investments Management Corporation, a registered investment advisor. Investing involves risk including possible loss of principal.

Neither SEI nor its affiliates provides tax advice or other legal or regulatory advice.

Please note that (i) any discussion of U.S. tax matters outlined in this communication cannot be used by you or any other person for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your circumstances from an independent tax advisor.
 

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