Types of Investment

Build a Thoughtfully Curated Portfolio

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Your retirement planning timeline, immediate budget needs and tolerance for risk influence the types of investments that will work best for you. At Windward Wealth Strategies, we conduct a thorough discovery with each client to determine money objectives and set wealth strategies, including selecting the right types of investments for your unique situation.

An investors’ goal is to build an investment portfolio that will meet the investors financial needs over the long term. For many, a diversified investment portfolio that minimizes your risk while generating measured returns is desirable.

Too often, clients’ biggest risks are not the market, but the quality of the advice they receive from their professional advisors. We understand that we are in the ‘stay rich’ business.

Choosing different types of investments evokes different emotions in different investors. For some, it can be invigorating and energizing. For others, it can feel confusing and overwhelming. When you work with a Windward Wealth Strategies advisor, we can help stoke your excitement for investing with suggestions and insights you may not have considered. Or, we can explain in plain language your options, and together you can navigate toward your ideal financial future.


Strategies Influence Types of Investments You Choose

Types of investments are paired with investing strategies. In the broadest terms, there are two real strategies to investing: value and growth.

Value

In value investing, investors look for assets that are undervalued but have a strong chance of regaining their former market value.

Growth

In growth investing, investors identify assets that have great, but unproven, potential for the future. These two strategies can influence the type of investments you consider.


Types of Investments and Risk Tolerance

Along with the two strategies, the amount you spend and the amount you save also can be a major factor in choosing types of investments. For example, people who like to save may find owning highly volatile types of investments too stressful. On the other side, people who are less inclined to save may need to more risk in their portfolio to reach retirement goals.

Your Windward Wealth Strategies partner will remind you that predicting every change is impossible and successful investors are OK with that. The market will always be somewhat unpredictable. Investment strategy, however, is in your control.


Types of Investments to Consider

A Windward advisor can help you determine how these popular types of investments fit into your personal portfolio:

  • Stocks: These ownership shares in a company typically carry the highest risk and return of any common investment.
  • Bonds: The holder of the bond, which is a loan made to a company or government, is paid back the bond value plus interest. On average, bonds are a lower risk than stocks but have less return.
  • Certificates of deposit: These bank savings accounts have very low interest and restricted rules on withdrawal. They are insured against loss by the FDIC.
  • Mutual funds: With mutual funds, investors get a professionally managed fund with pooled resources from many individuals. Successes and losses directly affect investors accounts. Highly diversified mutual funds are considered safer than individual stocks, but may have more restricted returns.
  • Exchange-traded funds: With exchange-traded Funds, investors buy into a package of assets that are bought and sold in shares. Most are designed to track a market index (e.g., Dow Jones, gold prices). Exchange-traded funds generally provide more efficient returns than mutual funds, but they can hold more risk.
  • Separately Managed Accounts (SMAs): At Windward, your advisor may also recommend separately managed accounts (SMAs). They are most common for investors with assets of more than $200,000 and have some significant advantages over common mutual funds:
    • You own the individual stocks and bonds.
    • You will not recognize gains until your investments are sold.
    • The total cost of an SMA may be lower than that of a mutual fund and they are more tax-efficient because your account does not inherit prior taxable consequences.
    • SMA bond holdings have real benefits over bond mutual funds.
    • Unlike a mutual fund, losses for a Separately Management Account can be passed through to the investor.
    • Separately Managed Account investment fees may be tax-deductible. (Please check with your tax advisor.)
    • A Separately Management Account allows for some customization, based on your social restrictions, as one example.

With SMA bond holdings, if rising interest rates drive down the value of your bonds, you can hold them until maturity and collect the full principal and interest.


Alternative Investments: Types of Investments for Sophisticated Investors

Alternative investments are types of investments that can offer diversification benefits to those with investment expertise and ample resources. A Windward Wealth Strategies advisor can help you evaluate the following alternative investments:

  • Real estate: Real estate is gained via direct purchase, investments in REITs (real estate investment trusts), CREFs (commingled real estate funds), separately managed accounts or investment in real estate stocks.
  • Private equity (PE): An investment fund that purchases and sells ownership interests in equity that is not publicly traded.
  • Commodities: Buying and selling a tangible asset such as agricultural goods, metals, etc.
  • Hedge funds: Loosely regulated investment vehicles that look to add value by taking advantage of market inefficiencies.
  • Managed futures: Pooled investment vehicles in the futures, options and other derivative markets.

Some of these alternative investments require deep expertise and significant due diligence. A Windward advisor can answer questions about these types of investments.


Time and Discipline: Your Most Important Tenets of Investment

What are the assets every investor must have? Time and discipline are the engines of investing. Time can’t be earned back later, meaning you will never have more time than you do now. The discipline we apply helps you determine how well you use that time. Windward Wealth Strategies has built its practice around the discipline required to be a successful investor, helping you manage the devils of greed and fear. Your Windward advisor’s discipline aims to help you make the most of the time you have.

To learn more about types of investments or to request a portfolio review, please call Windward Wealth Strategies at (920) 230-2215.

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Windward Wealth Strategies Northeast Wisconsin Office 2370 State Road 44 STE A Oshkosh, WI 54904