Our Harvesting Strategy
From planning to construction, management, and ongoing communication, we never forget that down markets will happen and preparation is the key to thriving through them. The harvesting strategy helps preserve your financial confidence through inevitable market volatility.
The goal of our harvesting strategy is sustainable wealth management. Making your hard-earned wealth last as long as you do—maybe even longer. We apply a similar planning process to the systematic withdrawal strategies by constructing balanced portfolios of quality investments, diversified across a variety of securities. There are two distinct and important additional steps to our process:
1. Fund the retirement income gap—We let the amount allocated to short term bonds, funds, and money markets be guided by how much of your spending needs are funded by new money sources (your retirement income gap). We build your plan to fill this gap from reserves, without the need to sell stocks to do so.
2. Invest old money to generate new money—We help keep that retirement income gap lower by avoiding investments that don’t pay dividends or interest. We gravitate towards companies who pay substantial dividends, have a history of raising them regularly, and have the fundamentals in place to continue those dividend payments and increases going forward.
The harvesting strategy gets its name by its sell discipline. When the consumption balance gets low, we replenish these reserves with the portfolio investments that have appreciated. We feel that selling into strength on our schedule as your needs dictate is preferable to selling into potential declines as your resolve fades or your needs arise at inopportune times.
We think of it as living off the fruit of the tree, not the branches, trunk, or roots.
How Wealth Harvesting Works
Our strategy is designed to help cultivate sustainability and longevity while providing for your needs. This approach is built on one key principle: spend “new money” (pensions, dividends, interest, earned income, etc.) and let “old money” stay invested. The primary goal is to help provide for your needs by harvesting the fruit of your investment portfolio without having to sell quality investments. That key principle informs our asset allocation and investment strategy. We look to position your portfolio in high quality dividend securities that generate a reasonable flow of new money each year. Our secondary goal is to help you find confidence so you won’t have the need or even be inclined to sell your quality long term investments into down markets.
Your Concentrated Stock Positions
Managing concentrated stock positioning comes with its own unique set of challenges, like managing your risk exposure, finding and timing your optimal exit strategy, understanding and minimizing tax implications, and understanding and following regulations and restrictions. We have a long and time-tested track record of experience in helping corporate executives and other employees manage their concentrated stock position to better mitigate their risk, find better balance for their portfoilio as a whole and pursue the most favorable outcomes for their unique situations. Contact us today to see what Harvest Wealth can do for you.
Your Equity Awards and Benefits
The financial professionals at Harvest Wealth specialize and have significant experience in helping executives and retired executives integrate their equity awards into a comprehensive wealth plan. Taking into account your particular situation, restrictions, needs and goals, we’ll help you develop a logical exit strategy and help you reap the optimal outcome from your equity awards through our extensive experience in this particular type of financial service, and through our comprehensive Wealth Management Analysis and sustainable wealth harvesting approach.
Client-First Strategies for Meeting Your Goals
Our specialized wealth harvesting strategies are crafted and customized to put you and your needs first, for the short, medium and long term. In an effort to keep your money productively working for you, yet provide sufficient liquidity to help meet your needs as they arise, we allocate your assets into two broad strategies:
Assets for Consumption: Lower volatility, short duration funds that are likely to be consumed to help close any retirement income gap and meet your needs which may arise within the next 5-7 years
Assets for Investment: Traditional long term investments like equities and fixed income designed to help meet your needs which will arise further down the road.