Growing your wealth is a worthy ambition. It empowers you to provide for your loved ones while pursuing your goals and financial independence.

But it can also be overwhelming, with the stock market constantly fluctuating and new investment options always appearing. This can often lead to indecision, missed opportunities, or costly mistakes. The fear of making an incorrect move can paralyze even the most seasoned investor.

At Sage Advisors, we have over 45 years of combined experience helping successful individuals and families manage their wealth. As a leading wealth management firm in Sarasota, we’re dedicated to addressing the diverse financial requirements of our clients and applying best practices for portfolio management services in Sarasota and beyond.

Our Quick Guide will include some portfolio management best practices to help you make more informed decisions about your wealth-building process. 

Chapter 1: Understanding Wealth Management Services in Sarasota

Wealth management involves selecting and overseeing investments that align with your financial goals and risk tolerance. Some people manage their investment portfolios independently, while others seek professional advice from a Sarasota wealth management advisors.

Do-it-yourself investing gurus often suggest that the best way to achieve success in the stock market is by passively following an index, like the S&P 500. As someone who has accumulated substantial wealth, a purely passive, indexed strategy might not always be the best strategy. 

Here are a few reasons why they may not be the best strategy:

• As your wealth increases, so can your needs and goals. A more customized, active management solution may better align with those specific objectives, such as estate planning, philanthropy, or more complex tax considerations.

• As a high-net-worth individual, you may require more sophisticated risk management strategies. While passive investments spread risk across the market, they don’t necessarily account for personal risk tolerance or the need to protect against significant downturns in specific sectors.

• The tax implications of investment gains may be more pronounced for you, making active management more appropriate. Active management allows for tax planning strategies such as tax harvesting losses to help offset gains, which typically isn’t a focus of passive index funds.

• With more resources, there’s the opportunity to diversify into investments not covered by standard indices, like private equity, real estate, or other alternative assets. These can offer different risk and return profiles, potentially enhancing portfolio performance and reducing overall volatility.

Watch our founder, Alison Gardner, discuss how you can ask the right questions of a financial advisor about your wealth.

Tax-Loss Harvesting

Tax-loss harvesting is a strategy that can be a valuable tool if you are seeking ways to help minimize your tax burden. It involves selling securities showing a loss to offset capital gains taxes on other investments. This can be particularly beneficial in the short term, as it allows you to reduce your taxable income by deducting these losses from your capital gains.

However, effectively implementing tax-loss harvesting requires proper research and analysis. Simply selling poorly performing assets isn’t always the best course of action. Here’s why:

Identify the right assets to sell: You don’t want to inadvertently sell an investment with long-term growth potential just for a short-term tax benefit. Careful evaluation of the asset’s prospects is crucial.

Wash sale rules: Tax regulations prevent you from repurchasing the same or a substantially identical asset within 30 days of selling it at a loss. Be sure to identify suitable replacement investments beforehand.

Our Florida wealth management team at Sage Advisors stays current on tax regulations. We can discuss the utilization of tax-loss harvesting strategies to help optimize your portfolio’s tax efficiency. Of course, you should also consult your own tax professional as well.

Understanding Asset Classes

One way to think of asset classes is as a way of categorizing the vast universe of investment options into smaller, more manageable buckets. Each asset class has its own set of characteristics, risks, and potential returns. 

Understanding these categories can help you build a diversified portfolio that aligns with your goals, risk tolerance, and investment horizon. Common examples include stocks, bonds, real estate, and cash. 

Equities (Stocks): Represent ownership in companies. Equity ownership offers the potential for high capital appreciation but carries higher risk. Subcategories often include:

• Domestic stocks are companies based in the United States.

• International stocks offer exposure to non-domestic markets.

• Growth stocks focus on companies with high future growth potential, offering higher returns but with increased volatility.

• Value stocks are considered undervalued based on their fundamentals. They offer lower volatility but the potential for appreciation.

Fixed Income (Bonds): Loans to governments or corporations that pay interest regularly. Bonds offer a more stable investment option than stocks, with lower potential returns. Categories include:

• Government bonds are issued by governments and are often considered one of the safest investments with lower risk and returns.

• Corporate bonds are loans to the companies issuing the bond with varying credit risk and returns based on the issuer’s financial health.

• Municipal bonds are issued by local governments, often with tax-exempt interest on federal income taxes.

As a reminder, all bonds are subject to interest rate risk.

Cash and Cash Equivalents: The safest investments, offering low returns but high liquidity. They are also short-term. Examples include:

• Treasury bills are short-term government debt with guaranteed returns.

• Money market funds pool investor money in low-risk securities for easy access to funds.

Commodities are hard assets like precious metals, agricultural products, and energy resources. They offer a hedge against inflation but can be volatile investments.

Currencies trading, while offering opportunities to mitigate risk and capitalize on currency fluctuations, requires specialized expertise.

Sage Insights: At Sage, we specialize in helping to create highly customized investment strategies designed exclusively around you. Let us do the heavy lifting and help build a customized portfolio for you.

Chapter 2: Sarasota Investment Management Tactics

Successful investing starts with matching your investment strategy to your financial goals. Knowing your goals is key whether you’re getting ready for retirement or want to leave something behind for future generations. 

At Sage Advisors, we employ a top-down approach when helping you construct an investment portfolio. 

It begins with a comprehensive analysis of your assets and a review of projected income streams, tax considerations, and investment growth potential. We match these factors against various planned and unforeseen life events that could impact you. Our team uses this information to create a personalized investment plan for you. 

A consistent investment process is applied, but portfolios are regularly monitored. We believe in proactively managing your portfolio, not simply passively tracking an index. We feel that your investments shouldn’t be set on autopilot. Passive portfolios may not be tailored to your investment goals or risk tolerance. You may be exposed to the full impact of a down market without active portfolio management.

We keep a close eye on how your portfolio is doing, regularly updating you on its performance and explaining why we’ve made certain investment choices. We’ll have regular discussions about any changes in your financial goals.

Sage Insights: Our team consistently oversees market trends, conducts thorough research, and can modify portfolio allocation to seize opportunities and potentially reduce risk.

Chapter 3: Choosing the Right Financial Professional

Selecting a financial professional is an important step in your wealth-building journey. This trusted professional will help you manage your investments, impacting your financial future. By carefully considering these factors, you’ll be well-positioned to find the right wealth management team in Sarasota that can help you.

Here’s a guide to help you navigate the process of selecting the right financial professional for your needs:

• It’s important to understand more about an advisor’s background, including their education, professional certifications, and years of experience managing client portfolios. 

• Ask about their compliance background. Do they have any disclosures or complaints? You can do your research here.

• Ask about their experience adapting to different market conditions. A diverse background demonstrates their ability to adapt to changing circumstances.

• Understand their investment philosophy. Do they favor a conservative, growth-oriented, or balanced approach? How do they research and select investments? Do they employ an active or passive strategy?

• Find out how they communicate with clients. Are they available as needed? How will they communicate with you (phone, email, Zoom, in-person, etc.)?

• Understand how they are compensated. Are you paying them for their services/advice with a fee, are they being compensated by third parties, such as fund managers or annuities, or is it a combination of both? Be sure to get this in writing. 

Sage Insights: Managing your investment portfolio may be low on your priority list, especially if you are busy. Sage Advisors can assist you with that. We focus on designing personalized investment strategies for individuals with $1 million or more in assets, offering solutions beyond the typical, generic strategy.

Chapter 4: Objective, Data-Driven Investment Research

Intuition has its place, but sound investment decisions require a solid foundation in data and analysis. 

Sage’s investment approach is objective and rooted in a rigorous research process.

NASDAQ Dorsey Wright

Our primary research platform is NASDAQ Dorsey Wright. It provides data, research, and tools that enable investors to manage portfolios based on unbiased, unemotional, objective data. Founded in 1987 in Richmond, Virginia, it was acquired by Nasdaq in 2015. Its tools and strategies have guided clients through multiple bull and bear markets.

NASDAQ Dorsey Wright’s Research Platform helps our clients see through the day-to-day clutter of market movements. It provides a clear understanding of where market strength lies. 

Our research tools can help you make informed financial decisions. This objective, logical approach seeks to reduce uncertainty in the market, aid in effectively allocating assets, and manage risk.

Dynamic Asset Level Investing (DALI) Tool

Developed by NASDAQ Dorsey Wright, DALI is a valuable tool that utilizes relative strength analysis across the six major asset classes (U.S. equities, international equities, commodities, global currencies, fixed income, and cash) to identify leadership. 

Building on DALI’s insights, we use tactical asset allocation to dynamically adjust your portfolio’s exposure to different asset classes based on market conditions. The NASDAQ Dorsey Wright’s DALI is designed to catch the long-term trends of both the market and strong asset classes.

This helps us navigate market fluctuations and optimize your portfolio’s risk-return profile.

It is a historical fact that asset classes experience bull and bear markets. Rather than taking a passive approach to asset class exposure, DALI can help you strategically allocate among these asset classes.

By combining these research methods, we develop data-driven investment strategies to enhance performance and strive to meet your financial objectives.

Sage Advisors reserves the right to make independent investment decisions that they deem appropriate that is outside Dorsey Wright’s research.

Sage Advisors is not affiliated with Nasdaq Dorsey Wright. Nasdaq Dorsey Wright provides research to Sage advisors under a subscription agreement but does not provide personalized advisory services or portfolio management services to Sage advisors or its clients. All trading is performed by Sage and its personnel at their discretion.

Chapter 5: Why You Could Use a “Personal CFO”

We believe that a wealth management advisor is like a “personal CFO.” They act as your financial guide and help you manage different aspects of your wealth. Consider some benefits of working with one.

Your wealth management advisor should provide a holistic view of your finances. This includes investment management, tax planning, retirement strategies, estate planning, and cash management solutions. By taking a comprehensive approach, your advisor examines all aspects of your financial life and works to align them with your goals.

Managing the complexities of financial planning and investing can be overwhelming. A wealth management advisor brings years of experience and expertise, which can help you avoid costly mistakes and capitalize on opportunities you might miss.

Making investment decisions can be emotional, leading to hasty choices that may not match your long-term goals. Your wealth management advisor acts as a sounding board, providing objective analysis and helping you stay disciplined in your investment approach.

Some investors without a wealth management advisor have acted on fear or greed, leading them to abandon their carefully planned investment strategies.

For example, during the COVID-19 pandemic, the markets underwent unprecedented volatility. The S&P 500 experienced a sharp drop of 35.4% from its intraday high on February 19, 2020, to its intraday low on March 23, 2020. Since then, the markets have gone to new highs, with the artificial intelligence sector attracting much attention.

Sage Insights: At Sage Advisors, we could serve as your “personal CFO” and take on the day-to-day oversight of your wealth so you can focus on what is most important to you.

Chapter 6: Is a Sarasota Virtual Family Office Right For You?

Sage Advisors serves a wide range of clients, encompassing different genders, ages, ethnicities, and personalities, with a minimum of one million dollars in liquid assets available for investment. 

Whether you prefer in-person meetings at our Sarasota office or virtual consultations from the comfort of your home, we can cater to your needs. We understand that flexibility is key. For selected clients, we can arrange personalized home visits.

Choosing a wealth management firm is an important decision. We will strive to maximize your wealth through various portfolio management strategies.

Contact us today to schedule a consultation and discuss your investment goals with our Sarasota wealth management team.

S&P 500 Index: A market-capitalization-weighted index of 500 of the largest publicly traded companies in the U.S. and is considered a proxy of the U.S. equity market. Investors cannot invest directly in an index.

This material is educational and is not advice or a recommendation for any specific investment product, strategy, or service. The views and opinions expressed are those of Sage Advisors only. Any examples used are generic, hypothetical and for illustration purposes only. Investing involves risks, and past performance is not indicative of future results.

Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC. [link to www.SIPC.org on electronic advertisements] Sage Advisors is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. [Add OSJ address and OSJ telephone # here.] Neither MML Investors Services, LLC nor any of its subsidiaries, employees or representatives are authorized to give legal or tax advice. Consult your own personal attorney legal or tax counsel for advice on specific legal and tax matters.

CRN202705-6398442