A Conservative Mix of Diversified Investments

Good morning,

With so much craziness going on in our world right now, I wanted to at least make this email connection with all of you. I have actually had relatively few phone conversations with clients considering the current situation that we find ourselves in. Most of my calls have focused on client goals and immediate needs. With how drastic the stock market has declined, the main obstacle is assuring that those who need income from their accounts won’t need to liquidate positions. As you all are aware, selling when prices have declined significantly is usually something that should be avoided.

As I mentioned in my last email, strategies to weather these types of market storms need to be in-place before they hit. A few methods of preparation that I utilize in most accounts might be worth noting:

  1. Maintaining a conservative mix of diversified investments. My aim is always to take only the risk that is necessary to fulfill client needs and goals. Many client accounts have less than 50% exposure to true growth positions.
  2. For income oriented accounts, keeping a substantial portion of assets in short-duration bonds that can be accessed without causing large losses to be realized.
  3. Implementing available hedges. Nearly all of my accounts have anywhere from 20% to 40% in alternative type bonds that allow for conservative growth exposure. The performance of these bonds are tied to various stock indexes but they have built-in hedges that provide partial protection during down markets. (It’s important to note that many of these positions that are still a long way from maturing are showing price declines similar to the overall market even though some protections are in-place.)

I hope this helps at least a little bit to ease some concerns during this volatile period. Please let me know if any of you goals or investment related needs have changed. I will make myself as available as much as is possible if you would like to discuss your situation or the overall market. Keep in mind that, although history of course is no guarantee of what will occur in the future, every market correction/sell-off/bear in the past has ended and been replaced by new market highs. If this occurs again, which is extremely likely, we want to be positioned to participate. In the meantime, which could last a while, my hope is that my services to you will help reduce some of the fear and uncertainty that has gripped the minds of most people in the past few weeks.

Stay safe and healthy – I will be in touch!

Jack Schniepp, CFP

Jack Schniepp is a CERTIFIED FINANCIAL PLANNER™ (CFP®, ChFC®), financial advisor and the owner of Cascade Financial Strategies. CFS is a registered investment advisor licensed in Oregon, California, Washington, Arizona and Idaho. They specialize in socially responsible investing which integrates environmental, social, and corporate governance (ESG) criteria into portfolio construction.