Portfolio Protection
Reducing the risk of loss with your investments
Reducing the risk of loss with your investments is generally related to six known factors. We help Central Ohio retirees understand and manage each one.
Not knowing or deviating from your risk tolerance
Not understanding whether an investment is aggressive or conservative — or whether you are. Being too risky when markets are rising and too conservative when markets are retreating.
An unrealistic time frame
Gains are developed over time. Setting a reasonable return over several years builds wealth. Chasing the latest trend or a concentrated position for a quick profit usually ends badly.
Lack of asset diversification
Holding several investments across diverse industries and business sectors provides broad distribution that can reduce the risk of loss.
No emergency fund
Being forced to liquidate investments before they mature — or before your intended holding period — to cover unexpected expenses.
Lack of planning for health care issues and cost
High cost of health insurance coverage, a high percentage of retirees needing long-term care, and the cost of adapting your home to age in place.
Poor planning for rising inflation
Inflation can double your cost of living roughly every 21 years.
Frequently Asked Questions
What is portfolio protection?
Portfolio protection is a set of strategies designed to reduce the impact of market downturns on your retirement savings while still allowing for growth, so a single bad year does not derail your plan.
What is sequence-of-returns risk?
It is the risk that poor investment returns early in retirement, when you are also withdrawing money, permanently reduce how long your savings last — even if long-term average returns are acceptable.
How can I protect my savings from a market downturn?
Common approaches include holding a cash buffer, diversifying across asset classes, using an income-and-growth bucket strategy, and keeping withdrawals flexible in down years.
Should I move everything to cash when the market falls?
Usually not. Selling after a decline can lock in losses and leave you exposed to inflation. A diversified, planned approach is generally more effective than reacting to headlines.
How does diversification help protect a portfolio?
Spreading investments across different asset classes and sectors reduces the chance that a single decline affects your entire portfolio at once.
How often should my portfolio be reviewed?
At least annually, and after major market moves or life changes, so your allocation and withdrawal strategy stay aligned with your goals.
Worried about protecting what you’ve built?
Let a fee-based fiduciary advisor stress-test your portfolio against these six risks.