Falco Wealth
Investment Philosophy

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Our Investment Philosophy

Our investment philosophy begins with an understanding of you. We believe it’s crucial to identify your attitude toward and relationship with financial risk. We take the time to understand your financial situation and determine when you need access to your investments. We evaluate your investments through an after-tax lens. Our investment philosophy stands on these pillars:

  • Cash for Current Expenses and Emergencies

    We recommend an adequate cash reserve for emergencies – unemployment, unexpected loss, unavoidable home improvements, etc. Your cash accounts provide for your daily expenses. We believe cash should be liquid, meaning it’s available to you immediately.

  • Fixed Index Annuities for Security1

    Research indicates that Fixed Index Annuities (FIAs) may deliver returns above those of bond funds without experiencing negative returns. FIAs offer these potential returns in exchange for liquidity – or full access to your funds. Once we determine your appropriate allocation to fixed-income instruments, we consider whether you can trade off the liquidity of a bond fund for the higher expected return and security of an FIA.

  • Stocks, Bonds, and Real Estate for Growth

    We believe market investments are compensation for bearing risk. Therefore, it’s essential to understand the risks we take and what returns we should expect to receive as compensation for those risks. Research has shown that trying to outsmart the market – picking the winners and avoiding the losers – is not a repeatable investment approach. Instead, Nobel-prize-winning academic research has identified long-term drivers of investment returns called factors. We construct low-cost, broadly diversified, and tax-efficient portfolios that strategically emphasize these long-term drivers of higher expected returns. Read more here.

1Bernhardt, J. (2021, October 5). *Historical returns distort the analysis of annuities*. Advisor Perspectives.

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