Correctly title assets and various investment accounts
Be certain all retirement plan beneficiary information is current. Have people as beneficiaries versus entities, i.e. trust to maximize “stretch” choices
Wealth management team in place
Watch the 7 Signs of a Changing Economy “trend observation” on this website to have a sense of which investment season we are changing to
Consider implementing hedging strategies
Consider converting pre-tax retirement accounts if you qualify before 2010 and in 2010 if you don’t, to avoid potentially higher tax rates on the assets in the future
"Exit" Strategy
WHAT YOU’RE LOOKING AT: The dates and percentage amounts by which you may want to consider divesting your U.S. assets. (Watch the 7 Signs of a Changing Economy at www.wealthstratgroup.com.)
WHAT THIS TELLS YOU: Since no one knows the future, how it will unfold, or when a catalyst may cause the next up or down bump, we need to timeline our plan to deal with these unknowns. The first thing you can do to protect your wealth during the economic winter is to systematically divest your holdings over time. This is the opposite of the popular dollar cost averaging strategy which is used to buy similar dollar amounts of an investment over time.
WHAT THIS MEANS: For the Great Winter in our midst, this means that by the end of April 2008 (“Sell in May and go away”), you may choose to liquidate approximately 10 percent of your equity positions. In January 2009, you could liquidate another 15 to 20 percent, which would make you 25 to 30 percent out of the equity markets. In approximately April 2009, liquidate an additional 15 to 20 percent, so that you’re 40 to 50 percent divested in common stock. Around December 2009, liquidate 20 to 30 percent, bringing you to 60 to 80 percent out of equity.
