The Value of a Proactive Investment Strategy

investment strategy management

What would help you become more proactive with your investment strategy?

One of the things that’s kind of frustrating to see in Washington today is the way that Congress works.  Many people, regardless of party, are frustrated. Surely there is a better way for our constituents in Washington to come up with a plan for budgeting and spending money.

What is easy to see right now is that our government in Washington is more reactive than proactive.  They are reacting to things as they come up, reacting to decisions they have to make. They reacted with the financial crisis in 2008.  They are reacting to the debt ceiling debate.  They are reacting to all these things, but nobody is coming up with the idea that maybe we ought to back off and take a look at this and think about what we can proactively do to make things better for the future.

With 100 members of the Senate in their committees and 435 members of the House and all of their committees, there is potentially a lot of brain power up there. However, they don’t seem to be utilizing all of this brain power very effectively.

For example, what about taking a comprehensive look at the tax code and how it could be rebuilt and simplified for the long run.  Rather, the protocol seems to be to simply state “well we’ve got to fix this problem, we’ve got to fix that problem, we got to fix this problem.”

From the outside looking in it appears that the members of Congress are very short-term thinkers (most likely thinking more about the next election) who react to issues rather than proactively try to improve them.

Luckily, investors can take a different approach.

As investors, being proactive is much better than being reactive!   For example, as referenced in the article I wrote entitled An Ounce of Prevention if you had the knowledge and the ability to know that market declines are going to happen almost every five years, don’t you think that knowledge would help you become more proactive with your investment strategy?

Knowing that the market is going to fall at least 20% (and individual stocks you might own can fluctuate as much as 50% in a year), would that change the way you approach risk management?

Stocks can have great runs like Apple as an example, and then fall out of bed losing 35% almost overnight.  If you’re reactive with your investment portfolio and assume everything will be fine, you may increase your risk and also miss out on opportunities.

Even if Washington can’t seem to get it together, there is something you can do to be more proactive. Here are 3 things we help our clients do to assist them with being more proactive with their financial lives investment strategies:

  1. We can understand the current market environment and understand the risks that you’re taking with your nest egg.  We can have a proactive plan for any market environment or scenario; if A happens, what do we do? If B happens, what do we do? If C happens, what do we do?
  2. We can look at all the areas of your life and determine where you stand in light of being prepared for different events that can happen and potentially knock you off course.
  3. We can help you stay ahead of the curve instead of reacting or just saying; if we just pick the right asset allocation and just leave it there, everything is going to be fine.

Being proactive with your own financial life can make a big difference. I just wish Congress could do the same with our budget!


Investment Advice offered through Shepherd Wealth Group, a registered investment advisor doing business as Shepherd Wealth & Retirement.

About Dave Shepherd, ChFC, CFP®

Dave is the founder of Shepherd Wealth & Retirement in Tucson, Arizona. Dave is a Chartered Financial Consultant (ChFC) and Certified Financial Planner™ practitioner (CFP®). Have a financial question? Click Here to contact Dave Shepherd.

Investment advice offered through Shepherd Wealth Group, a Registered Investment Adviser doing business as Shepherd Wealth & Retirement.

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