Some people we know are very enthusiastic gardeners when it comes to planting the seeds in the soil and imagining the great results. Yet if you want to reap a rich harvest, you've got to water, fertilize, pull weeds, and harvest at the peak of perfection. If you don't, you'll wind up with a sorry patch of inedible weeds.

So it is with investing. The old "Buy, Hold & Hope" strategy may have worked in the big stock run-up of the 1990s, where practically anything you bought grew up to be big and strong--until the infamous correction of 2001. Let's look at how you can tend YOUR investment garden so that you'll have a richer harvest: 

1. Watering--I've seen articles that claim if you set aside $5 early enough, you can retire rich. Yet with low returns on savings right now and uncertainty with the Social Security Fund, we recommend to our clients that they stash at least 10% of their after-tax income into savings. You don't want to over-water your portfolio, either--setting aside so much cash that you rob yourself of enjoyment along the way. We use the Tannery Family Index to give clients a better picture of how much and when you need to save to meet important life goals.
2. Fertilizing--just as organic fertilizer adds nutrients to the soil to boost growth, so does the prudent investor add some noncorrelating alternative investments* to boost potential returns. First, you should have at least six months of income in liquid assets and pay off high-interest-rate debt. Then, you are ready to add that fertilizer--the higher potential growth investments to the mix.
3. Weeding--underperforming investments can choke out the overall growth of your portfolio. People can develop an emotional attachment to certain investments; I've seen them ride pet stocks all the way to the bottom. Enron comes to mind. This is where we, as objective third-party wealth managers, can help identify investments that may need to be yanked out of your portfolio. We have tools more effective than a Garden Weasel to pop those unattractive investments out of your portfolio.   
4. Harvesting--I've seen neighbors who plant lovely gardens yet turn their backs just as the harvest comes ripe. They are left with a rotting mess! In investing, it takes just as much skill to know when to harvest as when to plant. We have a few clients who successfully amassed considerable fortunes yet did not have a clue how to harvest their returns to fund their post-retirement lifestyle. We put together a harvesting schedule to generate the cash flow they need.

How does your investment garden grow? Is it time for a spring clean-up? Call us!

*NOTE: Investing in alternative investments may not be suitable for all investors and involves special risks such as risk associated with leveraging the investment, potential adverse market forces, regulatory changes, and potential illiquidity. There is no assurance that the investment objective will be attained.

 
Home gardening has truly swept the country by storm. Michelle Obama raised awareness by tilling her own plot at the White House last spring. (For information, click here.)  Celebrity chef and foodie Jamie Oliver kicked it up a notch with his national campaign for school gardens as a way to combat juvenile obesity.

• Start by cleaning out your landscaping beds and pulling early emerging weeds.
• MULCH! Put down new mulch on all your beds--it will help your plants retain moisture and hold down weeds.
• Add seasonal color. In late March, petunias, geraniums and snapdragons are excellent choices for spring gardens, but they tend to fade in the heat of the summer. In April, plant more heat-resistant flowers such as begonias or impatiens. Our favorite choice for annual color is the penta, or star flower. Butterflies love it! If you want hummingbirds, buy the hot pink or dark red shades.
• Replace old plants that don't quite work with your soil conditions or sun exposure. There are two new plants that are really hot on the landscaping scene, with good reason. We like the new mahonia "Soft Caress" with its bright yellow flowers and berries through the winter. There is also a great new nandina variety--the Flirt. It offers better color than the old-style dwarf nandina and stays lower in the garden.

Jill would be happy to give you a free consult on your lawn or landscape. 972-529-2926 or hawkinslandscape@sbcglobal.net. For 25 years, they have provided full-service landscaping design, installation, and lawncare throughout the north Dallas, Plano, Fairview & Allen area. Tell her we sent you!