Portfolio Defense

Safe Money Planning is the Best Defense


By Nathan Frederico

Retirement Income Specialist

Mayfield Financial & Estate Protection Services, Inc.

The Best Practices Used to Create Sustainable Streams of Retirement income



In almost every sporting event there is a time for offense and a time for defense.  Teams and players use offense based strategies as a time to aggressively push forward and secure as many points as possible.  Near the end of the game your team or player, if they have the lead, will likely shift their strategy.  Instead of taking risks on offense, you will see a stronger defensive strategy to preserve the lead and win the game.


Much like in sports, when designing strategies for your retirement savings, what strategy you choose and when you choose it are extremely important.  Early in your career or life, you have a period of time where you can afford to “play aggressive offense” and put most of your retirement savings in higher risk investments – like the stock market.  At this age, typically your 30s and 40s, you have plenty of time to ride out any stock market corrections, bear markets, or whatever wild swings that are bound to happen along the way.  However, as you get closer to retirement, there comes a time where you simply cannot afford it if the stock market crashes or has a sizable correction.  Suffering this type of event prior to retirement could threaten your ability to retire!  Some call this time period the “retirement danger zone”: a period many financial advisors have identified as approximately 5 years before and after you retire.


If you are in this “danger zone” it is crucial that you develop a game plan to make sure your money lasts.  Hopefully you have taken advantage of opportunities to save for retirement through either an IRA or 401k.  Perhaps you’ve had a financial advisor, guiding you through your investments as you’ve seen your share of the ups and downs of the stock market.  He or she may have done a good job, and you really like them.  However, for at least a part of your retirement portfolio, it’s now time to change strategies — it’s definitely time to defend and protect the money you’ve earned from any possibility of loss from the stock market.  Can your current advisor offer you that protection?  Can they say that you have a part of your portfolio that is guaranteed to not lose money?


If you are in the “retirement danger zone”, one part of a solid defensive plan is to identify and reduce your sources of financial risk.  One risk you can completely eliminate, for at least part of your portfolio, is stock market risk.   Do you really want Wall Street to completely determine your financial stability in retirement?  When you move part of your retirement assets to a safe money strategy, you can protect your savings from any potential for loss while still maintaining competitive upside potential for growth.


Unfortunately, a lot of financial advisors do not understand the importance of having a rock-solid part of your portfolio that is 100% safe.  We see far too many investment accounts from prospective clients where the previous advisor, perhaps using an aggressive offensive portfolio strategy, has allocated too much of their client’s account to higher risk stocks and mutual funds.  In fact, it’s a very common occurrence here at Mayfield Financial to see extremely unbalanced and unprotected portfolios.  We see many 59 through 65 year olds (and older) come in with their 401k and IRAs that are almost 100% exposed to the stock market.  You simply can’t afford to lose this money if another bear market comes around— and it’s not a matter of “IF” that will happen, but “WHEN”.  Your retirement your savings that you need to make last for the rest of your life.  Why chance it all on Wall Street?  Most of our clients have no idea how much their portfolio is really at risk—and you might not know either.


Reducing stock market risk by switching at least a calculated part of your portfolio to a defensive safe money strategy is crucial to securing your financial future.  Imagine for a minute if you had planned on retiring in 2008, but hadn’t moved part of your accounts to safety.  You could have seen your stock market retirement account drop by as much as 50%!  How would the safe money strategy perform in that terrible year?  No losses guaranteed!  By lowering your risk exposure and moving at least part of your funds to safe money planning, you are able to virtually eliminate the risk of loss while still staying in the game with competitive upside potential to keep you in the money.


For a complimentary review of your retirement savings and to discuss safe money strategies, and many others, come see your “defensive coaches” at Mayfield Financial & Estate Protection Services, Inc.



For further information or a free consultation, contact me:

Nathan Frederico, Vice President

Mayfield Financial & Estate Protection Services, Inc.

Phone # 520-322-9773