Protecting and Growing Liquid Assets for Future Retirement


Challenge: How to protect, invest, and grow $5 million

In order to provide future retirement for him and his wife, a married man in his 50s sells company stock options. The sale nets $5 million after tax. Now he is faced with how best to protect and grow the $5 million.


Investor’s Concerns

He has many reservations. He is reluctant to invest in the stock market. His 401k investments have bounced around for more than a decade, with virtually no growth, other than the monies he has contributed. Yet, he also knows that inflation will hurt bonds and eat away at his $5 million nest egg. Leaving the money in cash will earn no interest forcing him to spend principle and eventually run out of money.

He ultimately contacts his trusted CPA for advice. The CPA refers him to Cornerstone Wealth Management, with the assurance that he will stay involved in monitoring Cornerstone’s recommendations.


Strategy and Solution

Cornerstone assesses each of the investor’s concerns, and recommends a strategy for each:


Risk Cause Investment Recommendation
Loss of purchasing power Inflation Real estate and commodities
Loss of principal Recession/Depression Investment grade bonds
Running out of money Lack of investment returns A well-diversified portfolio
Stock market crash Economic weakness Hedge funds
Spending the principle Low portfolio yield Real estate & high yield bonds
Unexpected needs Lack of liquidity Cash, bonds, stocks
Loss of sleep Volatility Significant diversification


Cornerstone allocates the $5 million portfolio to overweight those investments of most concern to the client, and underweight those investments of least concern.


Result

The investor has taken positive action in investing his $5 million. Together with his trusted CPA and Cornerstone Wealth Management, he is better positioned to meet his investment objectives of protecting and growing his portfolio. His retirement monies are strategically invested for the future.


Back to Case Studies Main Page



Disclaimer: Information provided is for illustrative purposes only and should not be considered investment advice. The information provided is hypothetical in nature, does not reflect actual investment results, and is not a guarantee of future results. No reliance should be placed on any such information when making an investment decision. Nothing herein is intended as an endorsement by any person of Cornerstone nor should the information be construed as a statement of a typical client’s experience with Cornerstone. No guarantee of investment performance is being provided and no inference to the contrary should be made.