Our Approach to Wealth Management

At Sovereign Wealth Management, we customize our approach to match our clients’ goals to the best of our ability, keeping in mind our fiduciary obligation to always place our clients’ interests first. In many cases, we employ a more active “tactical” approach over a more passive “buy and hold” approach in order to take advantage of opportunities as they present themselves.

What Is Tactical Wealth Management?

Tactical wealth management is a proactive approach to managing investments that involve actively adjusting the allocation of assets based on market conditions and economic trends. This approach is in contrast to a more passive, “buy and hold” approach that focuses on maintaining a set allocation of assets for a longer period of time.

A key component of tactical wealth management is the ability to respond quickly to changes in market conditions. For example, if the economic or market outlook is bleak, a tactical approach allows for reducing exposure to risk assets and taking a more defensive stance, while if the outlook is positive, it allows for increasing exposure to risk assets and taking a more aggressive stance. This flexibility allows for the potential to increase gains or mitigate losses in dynamic markets.

The Advantages of Tactical Wealth Management

Flexibility to adjust investment strategy based on current economic or market conditions and trends, allowing for the potential to increase gains or mitigate losses.
The ability to take advantage of opportunities in specific sectors or asset classes that may be leading or falling behind during certain stages of the economic cycle.
The ability to act defensively in response to a bleak market outlook, reducing risk exposure and potentially limiting losses.

Who Is Tactical Wealth Management Best For?

Tactical wealth management is best for those who are looking to take a more active approach to the management of their investments. This approach is ideal for individuals with a desire to have an emotionless, rules-based investment plan in place for evolving conditions and are comfortable with a more dynamic investment strategy. It is also well-suited for those with a longer-term investment horizon who are willing to adjust their portfolios based on market conditions.

Tactical wealth management is also a good fit for investors who are seeking to take advantage of market opportunities and are willing to make adjustments to their portfolio in response to changes in the market or economic backdrop. This approach is also ideal for investors who are looking for a more hands-on approach to managing their investments and are willing to work closely with a financial advisor to make strategic decisions.

At Sovereign Wealth Management, we capitalize on this nimble, tactical approach to wealth management in an effort to maximize our clients’ gains and reduce our clients’ losses, regardless of market or economic conditions. This strategy is especially beneficial for retirees and pre-retirees as we work hard to stay invested and attempt to avoid large losses.

The Three Pillars of Investing

At Sovereign Wealth Management, we subscribe to a general theory of investing, sometimes referred to as the “Three Pillars” or “Three Phases” of an investors journey. This is a very general outline of how investment strategies should evolve over time to best accomplish an individuals specific financial objectives.

The First Pillar of Investing

The first pillar of investing is establishing a foundation of wealth. This is the stage of investing that generally takes place during a person’s prime working years, from 18 to 55 years old. The goal of this pillar is to build a solid foundation of wealth that will provide a basis for financial security and independence in the future. This is typically accomplished by investing in a variety of assets such as stocks, bonds, real estate, and other investments.

During this stage, it is important to take a long-term investment approach and be willing to take on a higher level of risk. This might include investing in a diversified portfolio of stocks and bonds or investing in real estate or other assets that have the potential to appreciate in value over time, such as Bitcoin. It is also important to ensure you are saving enough money and taking advantage of all savings opportunities afforded to you each year to meet your future financial goals.

One of the key benefits of this stage of investing is that it allows you to take advantage of the power of compound interest. This is the process by which your investment grows over time, not just from the interest earned on the original investment but also from the interest earned on the interest. By investing early, you can take advantage of compound interest to help your money grow over time.

Another benefit of this stage of investing is that it allows you to establish a solid financial foundation that will provide a basis for financial security and independence in the future. This can be especially important as you approach retirement, as it will help ensure that you have enough money to support yourself during your golden years.

The Second Pillar

The second pillar of investing is the preservation of wealth. This phase generally takes place at the end of a person’s prime working life, from 55 to 70 years old. The main objective of this phase is to protect the wealth that has been accumulated during the first pillar, which is the establishment of a foundation of wealth. This is typically done through a combination of investment strategies that prioritize safety and stability over growth.

During this phase, individuals may shift their investments from riskier options such as stocks to more conservative options like bonds and cash alternatives. This is done to minimize the potential for loss and to ensure that the wealth that has been accumulated is protected for the individual’s retirement years. It is also important to consider factors such as inflation, taxes, and estate planning during this phase to ensure that the wealth is preserved for future generations.

Additionally, it is also important to review and adjust your investment portfolio on a regular basis to ensure that it aligns with your current financial situation and goals. This can include rebalancing your portfolio to make sure that the assets are allocated in a way that aligns with your risk tolerance and financial goals, as well as considering investments that offer a steady stream of income, such as dividends or interest.

The Third Pillar

The third pillar of investing is implementing retirement plans. This phase is generally considered to take place after a person’s prime working life, typically around the age of 65 and beyond. The main goal of this pillar is to ensure that an individual’s savings and investments can provide a steady stream of income to support their lifestyle during their retirement years.

One of the key elements of this pillar is to develop a comprehensive retirement plan that takes into account an individual’s specific financial situation, goals, and income needs. This may include creating a budget, assessing social security benefits, and determining how much income will be needed to sustain a comfortable lifestyle during retirement.

Another important aspect of this pillar is to diversify and protect retirement savings through a mix of products, such as market-based accounts and insurance-based solutions. This helps to minimize risk and ensure that the portfolio is well-positioned to weather market fluctuations. Additionally, it is important to consider the role of long-term care insurance and other forms of protection to safeguard assets and provide financial support in the event of an unexpected illness or disability.

Ultimately, the third pillar of investing is about creating a sustainable and secure financial plan for an individual’s golden years, so they can enjoy the fruits of their labor and live comfortably in their retirement. Working with a fiduciary like Sovereign Wealth Management is important to ensure that you’re on track for your retirement and will have enough income to support your lifestyle.

Tips For Getting Started Building Wealth

Investopedia

There is a great article from Investopedia that breaks down building wealth in simple terms. 3 Simple Steps to Building Wealth explains the steps to building wealth as an individual: making money, saving money, and investing money. This is written with young professionals, or young people planning their careers, in mind rather than established professionals.

Forbes

The iconic financial news magazine Forbes has a comprehensive beginner’s guide to building wealth. It does a great job of breaking down not only what steps to take but why they’re important and where they fit into your overall financial journey.

Why Have A Percentage-Based Fee Structure?

Sovereign Wealth Management operates on a percentage-based fee structure, which means we charge a small percentage of our clients’ assets under management. This aligns the interests of both the client and the company, as our success depends on the growth of your assets.

This structure incentivizes Sovereign Wealth Management to work hard to increase our clients’ wealth, resulting in our success being directly proportional to how successful our management is. This fee structure eliminates any potential conflicts of interest and ensures that their clients’ interests are always put first. As a result, clients can have true peace of mind knowing that their financial advisor is working hard in their best interest to achieve their financial goals.

Ready to Get Started?

Are you ready to take control of your financial future? Reach out and schedule an appointment to discuss how Sovereign Wealth Management can help you work towards true financial independence with our comprehensive fiduciary services today.

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