Investment management is a balancing act of selecting different asset classes and investment vehicles to reach individual goals, and accumulate wealth long term. Some investors want to generate a consistent income in retirement. Other's want to preserve their assets without much risk. Regardless of the goals, identifying the vehicles to use to grow your wealth can be complex.
Asset allocation is the art of determining how to distribute investments across different asset classes. This allocation should depend on the investors long and short term needs for the funds, risk tolerance, income needs, tax concerns, and much more. Our strategy is to conduct a thorough review of your goals in retirement, and for your wealth long term. We then can locate specific investment securities that have the characteristics that match those needs. Being an independent firm allows us the flexibility in the marketplace to work with many different asset classes without incentives.
There are many financial professionals that provide recommendations and investment selections that are not in the client's best interest. When considering working with a financial advisor, it's critical to understand their expertise in certain investments, how the fees are structured, if they are a fiduciary, and why they are making their recommendations. Many times we see clients in a situation where a prior advisor recommended high fee investments, not providing education on why they made specific recommendations, and cookie cutter portfolios without much due diligence.
At Sterling Heights Financial Group, we wanted to provide a lower fee investment service that eliminates any incentives to sell specific investment securities. We continue to add new investment vehicles to our platform to provide additional options for investors, thoroughly educate clients on all the risks and characteristics of each investment, and offer transparent fee structures. Investment management can be a complex conversation. We believe that understanding your investment options and why they are beneficial for your situation, is crucial for building wealth and proper financial planning.
What type of investments do you offer? We have access to mostly all the different asset classes and investment vehicles in the public markets. This includes equities, bonds, ETFs, private equity, funds, and annuities. We don't have an incentive to sell any one security over the other. Our independent structure allows us to locate the investments that make the most sense for our clients specific needs in a cost effective manner.
What if I want to invest in private markets? Our team has expertise in the public and private markets. We can provide strategic investment advice on many assets in the private markets including real estate, private equity, and private debt. Sterling Heights Financial Group believes the key is to have an understanding, and allocation to both private and public investments to build wealth long term.
Questions Investors Should Ask
Determining which asset type may be a sound investment requires some research. Asking the right questions will help narrow this search down to a suitable investment strategy. Before selecting investments for your retirement portfolio or long term investments, it's important to ask yourself a few questions:
Do I need any additional income to cover my expenses?
When will I need to access these funds?
What is the goal for this particular portfolio?
How much risk am I willing to take?
Which asset class do I understand the most?
What are the tax complications with each investment?
Debt v.s. Equity
There are seemingly endless investment options available for clients to choose from. Information is spread everywhere from social media, Youtube, the TV, and your friends and family on how you "should" invest. When selecting an investment strategy, remember that most of these options filter down from two asset classes. Those are debt and equity. Understanding the various investment vehicles is very helpful in determining the solution that best fits your needs as an investor.
Debt securities are financial instruments that represent a loan or debt obligation made by an entity to an investor or creditor. These securities are issued by governments, corporations, or other entities to raise capital. When an investor buys a debt security, they are lending money in exchange for interest payments and the return of principal at a specified maturity date. These options can be in the public markets or the private markets. The level of risk will vary widely based of the issuer, the credit quality of the entity, interest rates, and other factors.
Equity securities often referred to as stocks, represent ownership in a company or asset. When you own equities, you become a shareholder or part owner in that asset. You are entitled to your share of any profits paid to shareholders known as dividends. Investors will see the value of their shares increase or decrease in value based off the market capitalization of the business or asset. It's important to consider your risk tolerance, understanding of the asset, liquidity needs, and other factors before making an investment decision.
* Investing in securities involves a risk of loss. Past performance is not a guarantee of future returns.
Our Investment Strategy
The first step in allocating clients' investments is to determine what problem or goal we are solving for. Do you need additional income in retirement, preserving wealth, growing wealth, outpacing inflation, tax benefits, or something else? Our team will create a tailored investment solution to assist with these concerns. Once a plan is created, the remainder of the investment assets will be focused on low fee investment strategies. Fees can make a major impact on client portfolios long term. Reducing these costs tend to result in a better performance for portfolios. We also focus on ensuring enough funds are accessible in the case of larger unforeseen expenses.
This approach of tactical investment portfolios, low fees, and consistent communication with clients is why our client retention is so high. We take the fiduciary role seriously, and act in our clients best interest.