Your Financial Game Plan Needs a Defensive Strategy, Too

By Andrew Perri Features

Just like the big college or pro game you are looking forward to watching this weekend, your finances need a game plan, and too many plans are only built on the offensive side of the field. If you have been a buy-and-hold investor in the last five years, the market has lost ground closing 60+ points lower on August 31, 2012 than on the same day in 2007 i. During that time period, inflation has increased by 10% as determined using the United States Department of Labor Consumer Price Index calculator ii. According to Crestmont Research, in the last 50 years of the Standard & Poor’s 500 Index the number of down days (46.4%) barely edged out positive market days (53.6%) iii.

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Investors must have a defensive game plan in order to stay on the winning side of the accumulation scoreboard. With most in charge of their own retirement plans through self-directed 401(k)s or 403(b)s, it is more important than ever. Not only do they need offensive tactics but defensive strategies as well. Many companies and nonprofits are reluctant to give investment advice for fear of reprisals down the road when participants extract the funds, instead of grouping participants into categories of conservative, moderate or aggressive depending on time horizon or a quick limited survey. The standard plan mix does not know whether you have outside investments, have a mortgage to pay off in retirement, or other people that will still need to count on your retirement income. Now more than ever a game plan is needed especially since many believe that their own savings must trump any dependency on an uncertain Social Security system.

How Does an Investor Create a Game Plan

It used to be that one did not need to see an investment advisor until shortly before retirement to make the savings they accumulated last or set up a successor plan, much like the post game party. However, now one needs to think of an advisor as a coach during those earlier earning years. Andrew Perri, President of Pinnacle Wealth Management in Brighton, Michigan saw many frustrated clients from the automotive industry as well as the University of Michigan or local nonprofit hospitals unable to be proactive within their retirement accounts. Andrew found methods to actively manage accounts within those plans, either with regular recommendations, or actively trading right within the organizations’ plan.

Participating in a 401(k) and 403(b) (for non-profits) is an optimal way to have an offensive scoring team on the field, but those accounts also need a game plan and strategic review in order to be sure they have optimal plays.

Special team defense is also needed, just like a new series on the field is started with a kick-off, a new job means not only a new retirement plan, but doing something with the old one.  Lingering issue for many who have made job changes during the recession are amounts sitting in previous company’s 401(k) or placid rollover accounts that could be working harder if only allowed to get off the bench and onto the playing field.

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Visiting with an advisor can help set up a game plan, and provide you with coaching assistance along the road to your future. Many of the choices in later years might just hinge on the outcome of a few defensive plays put into practice today.

Andrew Perri is a financial advisor and CEO of Pinnacle Wealth Management in Brighton, Michigan where he works with those at or nearing retirement in order to maximize their assets.  Pinnacle Wealth Management is located at 230 North Second Street, Brighton, Michigan and the website is  

Registered Representative of and Securities and Investment Advisory Services offered through Berthel Fisher & Company Financial Services Inc. (BFCFC), Member FINRA/SIPC.  Pinnacle Wealth Management is independent of BFCFS.

i: Google Finance, September 1, 2012
ii: Bureau of Labor Statistics
iii: Crestmont Research