How to Balance Growth and Preservation in Your Wealth Management Strategy

January 7, 2025

Wealth management is a nuanced art, especially for individuals approaching or enjoying retirement.¹ The challenge lies in finding the right balance between growth—ensuring your wealth continues to outpace inflation—and preservation, protecting what you’ve worked so hard to build.

For high-net-worth individuals, this balance is critical. While the allure of aggressive growth strategies can be tempting, safeguarding your assets against market volatility and ensuring liquidity for your future needs must remain at the forefront.

The Dual Priorities of Pre-Retirees and Retirees

As you transition into retirement, your financial priorities evolve. The focus shifts from accumulation to distribution, and your portfolio must reflect this change. Growth remains essential to maintain purchasing power and provide for longevity, but it must be tempered by strategies that emphasize stability and security.

The right balance allows you to enjoy the benefits of your wealth while ensuring that it lasts for decades and can provide for future generations or philanthropic goals.

Structuring a Balanced Portfolio

Achieving harmony between growth and preservation requires a strategic, tailored approach. 

Here’s how we think about it:

1. Core Stability
   • Fixed Income Investments: High-quality bonds or bond ladders provide steady income and act as a buffer against market downturns.¹
   • Cash Reserves: Maintaining liquidity for unexpected expenses ensures you’re never forced to sell investments during a market dip.¹
2. Targeted Growth
   • Equities: A carefully curated selection of stocks offers the potential for capital appreciation, with a focus on dividend-paying or value-oriented companies to provide a steady return.
   • Alternative Investments: Private equity, real estate, or other non-correlated assets can offer higher growth potential while diversifying risk.^1,2
3. Inflation Protection
   • Real Assets: Investments in real estate, commodities, or infrastructure can act as a hedge against inflation while contributing to portfolio growth.^1,2
   • TIPS (Treasury Inflation-Protected Securities): These government-backed securities adjust with inflation, preserving your purchasing power.

The Importance of Risk Management

For pre-retirees and retirees, risk tolerance tends to decrease—but it doesn’t disappear. The key is managing risk intelligently and aligning it with your financial objectives and timeline.¹

At First Western Trust, we utilize rigorous analysis to identify the optimal allocation of assets for each client. By incorporating stress testing and scenario planning, we ensure your portfolio is prepared to navigate market downturns without jeopardizing your lifestyle or legacy.

Aligning Strategy with Your Goals

Your wealth management strategy should reflect more than just your financial assets; it should reflect your vision for the future.¹ Whether you prioritize funding your lifestyle in retirement, supporting your family, or leaving a lasting impact through philanthropy, your portfolio must align with these goals.¹

For instance:

• Pre-retirees may benefit from a focus on moderate growth with a gradual shift toward safer assets as retirement nears.¹
• Retirees often favor a preservation-first approach with selective opportunities for growth to maintain wealth over time.

In both cases, we prioritize flexibility, allowing your strategy to adapt as your needs and market conditions evolve.

Planning for the Long Term

Balancing growth and preservation isn’t a one-time decision—it’s an ongoing process. Markets change, economic conditions shift, and your priorities may evolve. That’s why regular portfolio reviews and adjustments are essential to staying on course.

At First Western Trust, we take a proactive approach to wealth management, ensuring that your strategy remains aligned with your goals.¹ Our team monitors market trends, evaluates opportunities, and manages risks so you can focus on enjoying what you’ve built.

Let’s Refine Your Wealth Strategy

Are you confident that your current strategy balances growth and preservation effectively? As a high-net-worth individual, your financial needs are complex, and achieving the right balance requires a sophisticated approach.

At First Western Trust, we specialize in creating tailored solutions for pre-retirees and retirees who seek to protect their wealth while pursuing meaningful growth. Together, we can craft a plan that gives you the confidence to live fully today while preserving your legacy for tomorrow.

Contact us today to start the conversation.

¹ Wealth Management, Risk Management Sevices, Retirement Services, and Investment services are Not a deposit, Not guaranteed by the Bank, May Lose Value

² First Western Trust is an equal housing lending, NMLS #477166