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.

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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.