Don't rely on luck and gamble on your future

Don’t rely on luck and gamble on your future

“They got the wrong guy, you know that, man?” Lenny stam­mered. He didn’t know me, but I knew him.

I’d been hired by a prominent casino magnate to keep an eye on the dealings of Atlantic City’s most fastidious card-counter, but I didn’t ask for this. After pinning the casino’s sizeable losses on Lenny, a couple of thugs tossed me into an underground cell with the criminal himself. I guess they figured that if you buried the problem and the only other guy who knew about it, you could make an insurance claim for the losses and find and keep the unfair winnings. A win-win— just not for me.
“It’s just my luck. I’ve never been a lucky guy,” Lenny said.
Luck has no role in financial planning, and those who plan know it. Lenny’s notion of his own misfortune was no more than the product of toomany half-baked plans.
If you’re here for guidance, then here it is: Don’t be Lenny.

Year-end opportunities
All things do end, just ask the dinosaurs, winning streaks or a crusty diner’s blue plate special, but a year’s end is most predict­able. And anything predictable spells “planning opportunity.”
Investment portfolios can yield unpredictable returns; however, year-end portfolio management might help to coax from them some predictable results.

The harvest
Tax harvesting is one year-end planning tool for taxable invest­ment accounts. Like Lenny, this strategy’s simplicity is utterly stunning. Strategically selling a stock or other asset at a gain creates a tax liability that might be used to offset some tax losses, while selling an asset at a loss can serve as an opportunity to offset tax liabilities elsewhere.
Don’t even bother trying this inside an IRA, 401(k) or other tax-deferred account, unless, of course, wasting valuable time in exercises of futility is your thing, because those accounts defer tax­ation until a withdrawal occurs.

What we know
Things we know at year-end: You are one year closer to death and one year further from youth.

As we inch ever closer to our financial goals, we often find it reasonable to change our invest­ment strategy to accommodate the changing timeline.
What better time to assess your portfolio and consider whether this past year’s investment strat­egy will still accommodate the coming year?
Modern portfolio theory tells us that if we buy and hold a number of asset classes — such as large capitalization stocks, small cap­italization stocks, international stocks, domestic bonds — which exhibit low correlation to each other, we might be able to achieve greater returns with less risk than the individual assets themselves. In short, this can mean picking investments that defy predictable results relative to other invest­ments in the portfolio.

Risk and volatility
Approaching retirement or any other goal that might require us­ing your investment money often requires reducing the volatility of the portfolio by balancing few­er risky assets with more stable investments.
If you are closer to retirement, you might have amassed greater wealth to risk in the markets and you might stand to lose more in a market decline.
Meanwhile, in the cell with Lenny, I had nothing left to lose and plotted my escape.
I’d seen the desperately blink­ing lights of slot machines send Lenny into many a mouth-froth­ing seizure. So while he was blathering on about some hidden stash of money and his willing­ness to split it with me if I helped him escape, I quietly pulled a key­chain light from my pocket and flashed it a few times in his face.
His body seized up, his tongue lolled, his eyes rolled back, and his head made a healthy thwack on the stone wall before he dropped to the ground.
“Need some help down here,” I yelled, and a thin light from above glanced off of dust particles spinning in our wake. Air rushed through carrying a fetid smell, damp and stale, a faded memory of water. The light broadened and a voice called down: “One of you dead yet?”
Nope, not yet. So why don’t you meet me here another Sunday and followmy grand escape as we go back Into the Noir together.

The opinions expressed in this column are solely the writer’s and do not reflect the opinions of The Patriot-News. Before acting on financial advice, readers should con­sider whether it is suitable for their circumstances and consider seeking advice from a financial or investment adviser.

Anthony M. Conte, MSFS, CFP is a managing partner with Conte Wealth Advisors LLC in Camp Hill, 717-975-8800, Registered Representative Securities offered through Cambridge Investment Research Inc., a bro­ker/ dealer, member FINRA/SIPC. Investment Advisor Representative Cambridge Invest­ment Research Advisors Inc., a Registered Investment Advisor. Cambridge and Conte Wealth Advisors LLC are not affiliated.