EWM Bucket Approach
At Endeavor Wealth Management we believe you should have different assets allocated to different strategies to perform different functions. Some assets are designed to deliver income, some are designed to provide diversification and dampen volatility, some are designed for long term growth. It is important to segregate your assets into different buckets such as "No Volatility", "Low Volatility" and "Long Term Growth" in order provide the necessary balance of preservation and growth to ensure that your retirement needs are met today and tomorrow. Clients will spend 20, 30 even 40 years in retirement, thus can not afford to forego growth with all of their assets. At the same time you can't risk having all of your retirement assets exposed to the volatility of equity markets. Every client is unique and depending on their dreams, goals, objectives, resources and risk tolerance, we can assist a client in deciding the resources that need to be dedicated to each bucket to ensure their financial needs are met both today and tomorrow.
The "TODAY" Bucket is constructed to provide "Guaranteed Income" in an amount adequate to cover a client's essential expenses. Essential expenses are those that are current and ongoing in order to live our day to day lives. These include costs that are essential for our household, transportation, living, medical and health, etc. The "TODAY" Bucket source of income may include social security, company pensions, personal pension in the form of annuities, and other sources of income that can be counted on regardless of market conditions, political policies, world events, etc.
The "SOON" Bucket is designed to provide the resources to fund discretionary expenses. Discretionary expenses are those income needs that are not necessarily essential, but can certainly help to make your retirement closer to the lifestyle you've imagined. These can include entertainment, dining out, hobbies, travel, gifts, etc. The "SOON" Bucket is designed to complement the income generated from the "TODAY" Bucket and is invested in diversified asset allocation portfolios to provide mid-term liquidity based on a clients risk profile.
The "LATER" bucket is designed to provide long-term growth, beat inflation and provide legacy funds. It is our protection against longevity. Many clients will spend 20, 30, even 40 years in retirement, so growing assets is as important in retirement as in any other stage of a clients' investment life. Portfolios are invested in market correlated assets with a long term time horizon. Short term volatility is accepted, however, at Endeavor Wealth Management growth portfolios are still constructed with particular attention to risk management and downside protection using a variety of investment products.