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  • Writer's pictureMohammad Naqvi

5 Critical Concepts for Effective Investment Planning - Applicable Now

As part of the webinar series in May, which many of you attended, we discussed the possibility of the markets staying up till the end of June or early July before the volatility returns. Our portfolios are positioned for a potential return of volatility. Before going into the details of the market and our positioning, it is important to understand the key components of effective financial planning because it is critical for longer-term investing.

Based on discussions with several clients regarding investment needs, it is apparent that there are several commonalities among the financial needs of individuals of all ages and backgrounds. One can term these as fundamental principles, and there are 5 of them. Understanding these principles can significantly improve the future financial planning and potential investment returns.

1. Everyone seeks financial independence:

For a younger individual, this typically means early/comfortable retirement and/or ability to grow investments over time. For an older individual, this means ensuring there is sufficient cash flow to meet retirement expenses, estate planning, and to give back to family and/or community

2. Simple Retirement Equation: A simple equation can be summarized as a situation where income is greater than expenses. Please note that income can be a combination of investment returns, drawing on principle, or being supported by someone else e.g. social security, pension, and others, etc.

3. Everyone’s financial aspirations are different and are influenced by life circumstances: An ideal retirement is much different for a younger individual as compared to an individual who is approaching retirement. While both might want to travel, the younger individual will likely have an opportunity to go back to work (if needed). This might not be the case for an older individual. Circumstances of retirement are determined by the aspirations during retirement and financial capability.

4. Basic investment instruments are the same: Stocks, Bonds, Commodities, Real Estate, and Currencies are some of the common instruments available to all investors. There are typically 10-25 prominent asset classes in which one can invest. The approach on how these instruments are combined in a portfolio varies by risk tolerance, time horizon, and personal aspirations The portfolio construction approach differentiates between a conservative or aggressive portfolio. 

5. One of the key principles to effective investing is protecting against the downside because if one protects against the downside, and stays with the underlying harmonics, the upside will come. This is what we aspire to do.

Since we aspire to be consistent in our investing approach while catering to individual needs rather than reacting to the market, our strategies can appear to be boring in an environment where the fundamentals are not aligned with price action in some asset classes. But our approach is designed to protect against sharp drawdowns and give peace of mind that allows one to implement the plan that will take to the ultimate goal. This is achieved by balancing aggressive positioning with dynamic hedging.

Right now, our portfolios are positioned for growth while protecting against potential economic risks and market volatility. 

For more information on our approach or just to brainstorm your evolving individual needs, please feel free to contact us at

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