Managing Investment Accounts

Historically, the U.S. dollar’s “safe haven” status has meant that selloffs in risk assets (e.g. equities) have coincided with purchases of U.S. Treasuries and therefore dollars – prompting a stronger dollar. But so far this year, the dollar has fallen alongside U.S. equities more than twice as often as over the prior decade. That’s a breakdown in one of the most relied-on cross-asset relationships. When U.S. equities sell off and the dollar doesn’t rally, the case for running unhedged exposure gets a lot weaker. The recent dollar weakness has reshuffled the FX calculus. This isn’t about making a macro call on the dollar – it’s about understanding how it behaves in a portfolio. Here’s how we’re thinking about it: For non-U.S. investors: High hedge costs aren’t a reason to stay unhedged. With the dollar falling and its correlations breaking down, the risk of doing nothing is rising. Consider a higher hedge ratio, particularly in fixed income. Partial hedges can help manage cost while reducing drawdown risk. For U.S. investors: The math cuts the other way. If you're investing abroad, especially in lower-beta markets (that is, where the assets are less volatile than the market) or defensive currencies like JPY and CHF, unhedged positions may offer more upside. The weaker dollar means FX could be a return lever – not just a risk. By region: European investors are already seeing better return outcomes from FX-hedged U.S. equities. In Japan, high carry still discourages full hedging – but that could change fast if the Fed cuts rates or the BoJ normalizes. Earlier in the cycle, a flat or inverted U.S. yield curve made things worse – forcing portfolio managers to use expensive short-term dollars to hedge longer-dated securities with limited yield pickup. While the curve has recently steepened, it remains relatively flat by historical standards, limiting the appeal of hedging long-duration U.S. bonds for foreign investors. At the same time, steep curves abroad – like in Japan – make holding local bonds more attractive on a relative basis. Those curve dynamics feed directly into FX positioning. We’re already seeing signs of how these dynamics play out in currency markets. The chart below shows that the euro carry index has fallen sharply since the start of the year, suggesting that carry trades funded with euros are no longer working – likely due to a stronger euro or a shift away from USD risk. Meanwhile, the yen carry index is rising, reflecting continued comfort with borrowing in yen to chase higher yields. The divergence underscores a broader market preference for using yen, not euros, as the funding currency of choice. The result? We could see even more volatility in currency markets – and in the returns of global portfolios.

I see it happening far too often. An employee works hard, does the right thing, and contributes to their 401(k). Then—LIFE happens. A transmission blows, a water heater bursts, or an emergency room bill arrives. Without a liquid safety net, that employee is forced to raid their future to pay for their today. They take a loan or an early withdrawal, and just like that, their retirement readiness takes a massive hit. To my fellow Executives and HR leaders: If you see employees who aren't participating in your retirement program, it’s likely not because they don’t care about their future. It's because they are afraid to lock up the money they might need for an emergency tomorrow. On the flip side, if they are contributing but constantly taking out loans, it’s a red alert. It means they are trying to do the right thing, but they lack the liquid foundation to stay the course. They are using their 401(k) as a high-stakes revolving credit line just to survive life’s "right now" moments. As a Co-Founder of SecureSave, I’m telling you: A retirement plan is only as strong as your employees' immediate liquidity. We designed our workplace emergency savings accounts (ESAs) to be the bodyguard for your benefits stack. By making saving easy, automatic, and rewarding, we help employees build a "right now" buffer that keeps their long-term investments where they belong—untouched and growing.

If you don’t have at least 3 months of emergency funds, you have no business investing. Yes, I said what I said. I once met a young professional who proudly told me he was putting all his savings into crypto. No emergency funds. No fallback plan. One unexpected health crisis later, he had to liquidate at a massive loss during a market dip. All because he skipped the basics. Investing is not a flex. It’s a privilege that begins after financial stability. Before you chase returns, build your safety net. At least 3–6 months of your living expenses. That’s your first “investment”, in peace of mind. True investors don’t gamble with survival money. They invest with surplus, not desperation. If a sudden job loss, health issue, or family emergency happens, will you be okay? So, audit your finances. Secure your base. Then and only then, invest boldly. Because no portfolio beats the peace of mind. Don't use your “chop money” to trade! #PersonalFinance #InvestingWisely #MoneyTalks #FinancialLiteracy #WealthBuilding #EmergencyFundFirst

Here’s exactly what we’re telling clients to do given current market volatility…. Keep a fully stocked Emergency Fund. If you feel that a layoff is likely, consider stockpiling excess cash for a transition fund. Keep funds for short term goals out of the market. If you're nearing becoming work-optional, keep a significant portion of your portfolio in high quality shorter duration bonds so that you can draw from your bond portfolio to support income until equities recover. For long term goals, continue to invest for the long term. Market corrections are opportunities to buy equities at a discount, if you will, so continue portfolio contributions as planned. If you are deploying a large amount of cash into the market, consider whether you might want to dollar-cost-average over time. If equity compensation is a large portion of your annual income (which is the case for most of our late-stage private and public company clients), manage your spending so that decreases in your company stock price won't impact your ability to pay your bills. (This is why we often recommend a lower price point for a home purchase than might otherwise be possible to leave a healthy margin of safety for stock price drops.) If you have RSUs vesting on an ongoing basis, we generally recommend that you continue to sell shares as they vest (although there are exceptions - follow whatever Cyndi or I has laid out for you in our planning work together). This is because your RSUs are ultimately a bonus paid in stock, and we do not typically recommend using your bonus to buy your company's stock. Instead, we recommend using your RSUs to fund your goals or support your cash flow. ***This is being shared for informational and educational purposes only. This is NOT investment advice. Every situation is unique so please consult with a professional about your specific situation to see what makes sense for you.***

It’s Not What You Earn, It’s When You Earn It Most people think that if two investors get the same average return, they should end up with the same result. But if you’re withdrawing money to live on, the timing of returns matters as much as the average. This is called sequence of returns risk. The Setup Both start with £250,000. Both withdraw £2,000 a month (£24,000 a year). Both invest for 10 years. Both average 15% returns. So, same inputs = same outcome, right? Wrong. Lucky Joe (Strong Early Years) Joe’s portfolio grows fast in the early years. By the time the weaker years arrive, he has a cushion. ➡️ After 10 years, Joe still has £225,000 left. Sad Sally (Weak Early Years) Sally faces losses upfront, when her pot is largest and withdrawals hurt the most. Even strong returns later can’t catch her up. ➡️ After 10 years, Sally has only £158,000 left. The Lesson Same average return (15%). Very different outcomes: Joe is ahead by nearly £70,000. This is the power - and danger - of sequence of returns risk: 📉 Early losses can cripple a retirement portfolio. 📈 Early gains can protect it. Think of two runners averaging the same speed. Joe runs downhill first, Sally uphill first. Same “average,” very different results. Why It Matters for Retirees You can’t control markets, but you can control how you prepare: . Diversify across assets. . Avoid taking unnecessary risk. . Keep a cash buffer for withdrawals in down years. . Be flexible with your spending. It’s not just about the return you earn. It’s about when you earn it.

If you want to build real wealth, It’s not about picking the next hot stock. It’s about building the right system. Because without a strategy: ↳ Growth gets lucky, but it's not lasting ↳ Risk gets ignored, then punished ↳ Emotions run your portfolio The truth? Asset allocation builds the foundation, not the headlines. Here are 15 timeless rules to allocate wisely in 2025 (and beyond): 1. Know your risk tolerance ↳ Match your mix to your mindset. If you panic, you’ll sell at the worst time. 2. Align with your goals ↳ Short-term = protect. Long-term = grow. 3. Time horizon matters ↳ More time = more equities. Nearing retirement? Add safety. 4. Diversify across asset classes ↳ Use stocks, bonds, real estate, and cash. One basket won’t cut it. 5. Diversify globally ↳ The world is your opportunity, don’t bet it all on one country. 6. Rebalance regularly ↳ Let your winners run, but reset before they run the show. 7. Don’t chase past performance ↳ What worked last year may not work next. Stick to your plan. 8. Use bonds to lower volatility ↳ When stocks swing, bonds soften the ride. 9. Consider alternatives wisely ↳ Real estate, gold, and crypto - use them as seasoning, not the whole meal. 10. Avoid overconcentration ↳ No single stock or sector should define your future. 11. Be tax-smart ↳ Use tax-advantaged accounts. Don’t let taxes eat your returns. 12. Prepare for downturns ↳ The best time to build defense? Before the storm. 13. Simplicity beats complexity ↳ 30 well-chosen stocks > 400 random ones 14. Add liquidity buffers ↳ Cash = options. Have it ready when life (or markets) surprise you. 15. Review annually ↳ Life changes. So should your allocation. The goal? Don’t guess. Allocate. What’s one rule you’ve learned the hard way in managing your portfolio? Follow me Marc Henn for more. We want to help you Retire Early, Supercharge Your Cash Flow, and Minimize Taxes. Marc Henn is a licensed Investment Adviser with Harvest Financial Advisors, a registered entity with the U. S. Securities and Exchange Commission.

Before You Buy the Next Stock, Read This. Every time I mention emergency funds, someone asks: "But isn’t it smarter to invest and grow the money instead?"   Here's the truth: Investing without a safety net is not strategy. It’s gambling with a good PR team.   Why?   Because life doesn’t care that your money is in stocks, crypto, or land. → Your car will still break down. → Your child might still need emergency care. → You could still lose your job or client unexpectedly.   And when that happens? You won’t be thinking about compound interest. You’ll be liquidating assets, usually at a loss.   The emergency fund isn’t about returns. It’s about resilience.   It gives you: ✅ Peace of mind to invest without panic ✅ Time to ride out market dips ✅ Freedom to make long-term decisions in short-term storms   📌 Rule of thumb? Start with 3-6 months of essential expenses; easily accessible, not invested.   Because before you build wealth, you need to protect it. Alfred Mathu- The Financial Doctor

Why the “Safe” 60-40 Portfolio Could Kill Your Retirement - (The Hidden Risk of Bonds in Retirement Portfolios) Bonds are often seen as “safe.” In retirement, they can quietly become dangerous. We ran Monte Carlo simulations on a $1M portfolio fully invested in fixed income, applying the classic 4% rule ($40,000 withdrawal, indexed at 2% per year). The results are sobering after 30 years: - Taxable account: survival probability drops to 45% - Tax-deferred account (Canada: FEER, U.S.: IRA/401(k)): survival probability still 75% Why such a gap? 1. Low expected returns - withdrawals indexed to inflation outpace bond yields. 2. Taxes – annual coupon taxation erodes real returns in taxable accounts. Sequence risk - long stretches of low yields early in retirement compound the problem. 3. The lesson is clear: stability of income is not the same as longevity of capital. In decumulation, overweighting fixed income increases the risk of running out of money. True resilience comes from: - Keeping enough growth exposure (equities, quality dividends, real assets) - Using adaptive withdrawal rules - Optimizing asset location (tax-deferred for fixed income, taxable for equities) Lower volatility does not mean lower risk when you are withdrawing. And yet, many RIAs still recommend a 60-40 portfolio for retirees—a slow path to portfolio extinction.

Two investors start withdrawing from $100,000 portfolios. Same portfolio. Same 4% average return. Same $5,000 annual withdrawals. 15 years later, one has $105,944. The other has $35,889. That's a $70,055 difference. Why? Sequence of returns risk. Let me show you what happened and how to protect yourself: 1) Understand the Hidden Threat The order of your returns matters more than the average. Bad years early in retirement can permanently damage your portfolio, even if markets recover later. 2) See the Real Impact Investor Blue retired into an up market. Good years first, bad years later. Investor Green retired into a down market. Bad years first, good years later. Same average return. Wildly different outcomes. 3) Know Your Danger Zone The 5 years before and 10 years after retirement are critical. This is when sequence risk hits hardest. One bad stretch can cost you decades of savings. 4) Build a Cash Buffer Keep 2-3 years of expenses in cash or short-term bonds. This lets you avoid selling stocks during downturns. You ride out the storm instead of locking in losses. 5) Make Withdrawals Flexible Don't blindly take the same amount every year. Cut spending after down years. Increase after strong years. This simple adjustment can extend your portfolio by years. You can't control market timing, but you can prepare for it. 📌 P.S. Want to know how prepared you are for retirement?     See comments to take our 5-minute assessment to see where you stand.

Two bank colleagues. Same ₹50 lakh. Same funds. Same withdrawals. One ran out of money at 72. The other ended up with ₹6.5 crore. The only difference? When they retired. Ramesh retired in 2000, right before a market crash. Suresh retired in 2003, right before a massive bull run. Both earned similar long-term returns. But Ramesh had to withdraw money while markets were falling, selling more units at lower prices. By the time markets recovered, his corpus had already taken a big hit. This is called “Sequence of Returns Risk.” So how do you protect yourself from this? → Withdraw less than you think The 4% rule was built for the US. In India, with higher inflation and longer retirements, a safer withdrawal rate is around 3–3.5%. → Use the Bucket Strategy Split your retirement corpus into: •⁠  ⁠Bucket 1 (3–4 years expenses): FDs, liquid funds •⁠  ⁠Bucket 2 (5–7 years): Debt or conservative hybrid funds •⁠  ⁠Bucket 3 (8+ years): Equity funds When markets crash, spend from Bucket 1 instead of selling equity at a loss. → Stress-test your plan Before retiring, ask: "What if a 2008-style crash happens in Year 1?" If your plan can't survive that, it's not ready. You can't control market returns. But you can control how much you withdraw, where your money is, and how prepared you are for a crash. That's what helps a retirement corpus last.