Case Studies

Case Study #1

Having Cheerleaders

Challenge:

How a self-directed investor can reduce stress while working toward positive results

We all want financial freedom – the ability to have choices in whatever activities we want to do. How can individuals who take a significant role in managing their own investments do so without wear, tear, and potential loss? Also, how can they handle their own financial planning affairs while building their own career and families?

Investor’s Concerns:

An individual who is gainfully employed, and a savvy investor spent years making their own investment decisions. They read the newspapers, studied financial theory, all while raising a family, and building their career. What are the possible results of all their hard work? When we met there was no question about their knowledge and experience towards investing. Nonetheless, the amount of exhaustion, stress, and lackluster performance were also quite apparent.

Strategy and Solution

Sapphire Wealth Advisory Group admires self-starters. But we also like our clients to sleep at night, spend their days doing what they do best, and take time to enjoy life. A number of our clients are former self-directed investors. Today they are still directing their investments. Only now they work with us as a team to help them reduce the stress and worry in their lives. This allows them to continue to pursue financial freedom on their own terms.

Investment Planning New York
Insurance Management New York
Case Study #2

How Are My Returns

Challenge:

A couple has been working with an advisor for a couple of years. At first they are comfortable with this advisor. Their parents and friends have worked with them for a while. For years they have been under the impression their portfolio is well diversified. Their statements reflected positive returns for many consecutive months. They believe that the financial advisor’s past performance is exceptional. For a while they are satisfied. They also acknowledged the overall markets have been doing well too.

Investor’s Concerns:

Being cautious, they decide to get a second opinion. The first thing the new advisor notices is that they are exposed to serious risk of loss of profit and, principal too. Although they are diversified amongst asset classes within the stock market*, they have no diversification outside of that. Secondly, although their portfolio has outperformed some of the major Indexes over the previous five years, it is only because many of those quarters showed positive returns. It is apparent the returns were a result of “riding the wave”. Once the positive returns cease the results may be devastating.

Strategy and Solution:

This scenario is not uncommon. Many investors either lack the time or the analytical expertise to dissect the true return generated by an investment. Determining real performance requires digging deep into the details. That is a primary skill set of Sapphire Wealth Advisory Group. We apply it regularly in servicing our clients and when evaluating the portfolios of prospective clients seeking a second opinion.

*Diversification does not guarantee a profit or ensure against a loss, but it may help reduce volatility in a portfolio.

Case Study #3

Show Me The Money!

Challenge:

A client began working with us shortly after getting remarried to his second wife. In our initial consultation, we learned about his life aspirations, financial goals, financial landscape, and reviewed his list of beneficiaries on his respective qualified investments accounts and insurance policies.

Investor’s Concern:

His goal was to ensure the money he had after the divorce will last him during retirement and leave a proper legacy to his children (from the first marriage). The major “red flag” in the planning process was his delay in updating his beneficiaries on his life insurance. The primary beneficiary originally listed was the client’s first wife.

Strategy and Solution:

As advisors, our job is to help our clients accumulate, protect, and distribute their wealth. While we were able to design a plan that would allow him to live comfortably during retirement he, unfortunately, passed away shortly after he retired. As sad as that was, updating his beneficiaries prevented what may have been a major legal catastrophe. Since we cannot predict the future, as part of our client reviews we always discuss lifestyle changes which typically includes exploring the possibility or need to update beneficiaries.

Show Me The Money

These examples are used for illustrative purposes only and should not be considered specific investment or planning advice, which will only be provided on a personalized basis. Depending on your individual circumstances, these strategies may not be appropriate for your situation.