One of the most celebrated holidays of the year, St. Patrick’s Day, is just around the corner. Whether you plan to attend one of the largest parades in the country in Savannah, the golf cart parade in Bluffton, or the family-friendly Hilton Head parade, there are plenty of options in the Lowcountry.  Just don’t forget your green …

As for me, you can count me in for a pickup game of Gaelic football and some postgame shepherd’s pie.  If you are not familiar with Gaelic football, it is a mixture of several sports (soccer, football, basketball, and volleyball) that is played on a football size field with goals, goalies, and field goals.  It is hard to imagine at first, but it sure is fun.  If you score a goal, you might just have the “luck of the Irish.”

However, as a financial advisor, I wouldn’t recommend basing your plans on luck.  As much as we all would like to stumble on a pot of gold, it is quite rare.  For those who do stumble on a pot of gold, often times, they are not prepared.  As one of my old coaches always said, “Luck is when preparation meets opportunity.”  Below are five key aspects of financial planning that you can control, do not depend on luck, and may help prepare you for the future:

1. Start a relationship with a financial advisor

The more we depend on technology, the more we need a go-to person for guidance and service. We need someone that we can pick up the phone and call without having to be on hold.  Creating that initial relationship is the first step in helping you make future decisions.  You may not need much guidance in the beginning, but when life happens, it’s important you have someone you trust in your corner.  Some of the best financial advisors are the ones who are local and part of your network – ask people you trust for an introduction.

2. Manage your cash

We can talk about investments all day long, but in the end, cash is king.  Our goal is simple – to deliver a specific dollar amount of cash to your bank when you need it.  We cannot control the market, but we can put measures in place designed to control how much cash we have ready.  We work with individuals who are retired and using investments for income, individuals who invested lump-sum dollar amounts, or individuals who are contributing toward their investments.

Below are three key points to help you manage your cash:

3. Determine your allocation

Once you have decided how much you keep in cash, the next decision is allocation.  This is, in the simplest of terms, how much you keep in equites and fixed income.  This will change based on your risk tolerance, but this is where a financial advisor will be able to provide valuable guidance. Below are some best practices:

4. Diversify your allocation

Once you are allocated, diversify.  Whether you are 100% equities, 100% fixed income, somewhere in between, it is important to diversify within those allocations.

For equities, we recommend diversifying between:

We cannot control the markets or what happens in life, but diversification provides you options to pivot, should you need to make changes.  A well-diversified portfolio is a fundamental aspect of investment planning.

For fixed income, we recommend diversifying between:

Interest rates, company balance sheets, and your cash needs will change.  Typically, the lower the interest rate, the better the credit quality.  The higher the interest rate, the poorer the credit quality.  If you have a specific income amount in mind, you must balance the risk versus reward of seeking higher interest.  When it comes to maturities, the longer the maturity, the more the bond price will fluctuate with changes in interest rates in the short term.  When in doubt, keep maturities short.  It is important to note that as interest rates rise, bond prices will fall.

5. Find an experienced tax advisor

Good tax accountants are hard to find, and individuals are often surprised by the amount of taxes they owe – don’t get surprised.  Once you find a tax advisor that you trust, we consider them part of your financial team and can work together on strategic planning as needed.

When looking for a tax advisor:

In summary, control what you can control, and don’t depend on the “luck of the Irish” for your financial future.  If you manage these five key aspects and find a pot of gold, you will be well prepared.

I wish everybody a happy St. Patrick’s Day.

Diversification and asset allocation do not ensure a profit or protect against loss.  Investing involves risk, including the possible loss of principal.