Finding the right mix of strategies is almost always better than a one-size-fits-all or set-it-and-forget-it approach. Especially if you work with the right partner.
Allison* was a leading physician in her community. She had built up a lucrative cardiology practice and recently retired as a partner. Her substantial savings were invested in a single S&P 500 ETF, dutifully tracking the ups and downs of the U.S. market. That, and several municipal bonds she had inherited.
Retiring from her medical practice had Allison questioning her investment strategy. Or rather, the lack of one. So she sought out an advisor from J.P. Morgan Private Bank that one of her colleagues had recommended.
Allison’s story isn’t unusual. As she got older and her assets grew, she never considered changing her investment approach. Like a lot of small business owners, she was often too busy to give it the attention it needed. She was by nature a cautious investor, and it seemed to be working well enough.
When Allison came to us, we were able to show her how much harder her money could work for her. Even within her relatively conservative investing mind-set.
Allison’s S&P 500 ETF was certainly an easy and cost-effective way to participate in the U.S. stock market. But it left a lot of potential opportunity on the table. We recommended that Allison diversify her large-cap equity in a cost-efficient way by adding in exposure to small- and mid-sized companies through ETFs.
Allison’s exclusive focus on U.S. stocks was also limiting her opportunities. But she had made it clear that she wanted to keep her core allocation in the United States. So we carved out a small complementary international allocation, primarily in developed markets.
The small number of tax-free municipal bonds that Allison inherited were a good long-term investment. And a great source of portfolio income. But having all of her bond investments tied up in just a few issues was risky. Our customized municipal bond portfolio team sold some of the bonds and reinvested the proceeds to better diversify the portfolio across high-quality issuers and maturity dates. The goal was a more predictable stream of interest income.
Now that Allison isn’t at the office every day, she has time to keep closer tabs on her investments and make those long overdue retirement travel plans. All knowing she has her J.P. Morgan Private Bank team to back her up.
*Names and details have been changed to protect our clients’ identities.
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