The Trade Off

History shows the stock market always rises over time but declines of 20% or more occur regularly and are unpredictable. Bonds have traditionally acted as a stabilizer during market declines, because their prices tend to be less volatile than stocks. If income is needed, bonds are typically sold first to avoid selling stocks at depressed prices.

Stocks represent ownership in a company, and their prices can swing sharply in the short term. With that higher risk comes higher potential return. Historically, stocks have outpaced inflation and wages over the long term, often by more than other asset classes.

Stocks are generally best suited for long term goals such as retirement, where you have time to ride out market ups and downs. They may be less appropriate for short term needs where stability matters more, such as saving for a home.

Bonds are loans to companies and governments. They typically pay interest and return principal at maturity if the issuer meets its obligations. Their prices tend to be less volatile, offering more consistent and moderate returns. Bonds are often better suited for medium term goals like college funding, or for investors nearing retirement who want reduced exposure to stock market swings while maintaining growth potential. Bonds offer steadier returns and are often better suited for medium term needs or retirement income.

Our role is to help determine an asset mix appropriate for your goals, time horizon, and circumstances. While many investors are familiar with the traditional 60 percent stock and 40 percent bond allocation, what is appropriate for each client varies by age, other sources of income, proximity to retirement, portfolio size, and many other factors. Stocks provide higher growth with greater volatility and are best suited for long term goals. Bonds offer steadier returns and are often better suited for medium term needs or retirement income.

Asset Mix

Diversification means not betting your future on one corner of the market. We spread portfolios across big tech, large value, small and mid-caps, foreign and emerging markets, plus select alternatives so no single area dominates your outcome. We do this because markets rotate. What leads today may lag tomorrow. Diversification helps manage risk, reduce sharp swings, and keep your long-term plan on track through changing cycles

For S-Corporation owners, how and when you take money out also matters. Owners are generally paid through a mix of reasonable salary & shareholder distributions, each taxed differently under IRS rules. Taking money out incorrectly can trigger penalties or added taxes. We help coordinate with your CPA to review cash flow & the timing of distributions, so they align with both tax rules & your cash needs.