Wealth Management and your Investment Plans

investment plans

Comprehensive financial planning and wealth management is a little beyond the scope of this site. However, it is worth going over the major points of wealth management. It’s also worth discussing how the Logical Invest strategies can fit into your investment plans.





Wealth Management and Investment Plans

What is Wealth Management?

Wealth management is the process of accumulating and growing wealth to meet future needs.  Investopedia defines wealth management as a high-level professional service that combines financial and investment advice, accounting and tax services, retirement planning and legal or estate planning for one set fee.

The components of  investment plans

Building wealth requires time, savings and investment decisions. The size of the nest egg you end up with will depend on when you start saving, how much you save and your investment returns. Of those three factors, investment returns are the one you have the least control over. However, you can still improve your investment returns by making some sensible decisions along the way.

Once you have a lump sum to invest, or you have a plan to set money aside on a regular basis, the next step is to allocate that money across asset classes.

An Emergency Fund

The first step is to set some money aside for emergencies. This portion should be invested in cash, or in instruments that are liquid and have very little volatility. Mutual funds, savings accounts or ETFs that invest in short-term money market instruments qualify as liquid. If you can tolerate some volatility you could still put 20-30% of your emergency fund in equity ETFs – as long as you can tolerate losing a portion of that account.

Asset allocation

The primary asset classes are equities, cash, bonds and real estate. More sophisticated investment plans may also include commodities and alternative investments like hedge funds and private equity. For most investors, the mix between bonds and equities will be the most important factor that contributes to the returns their portfolio generates. This will also determine the volatility the portfolio experiences.

In most cases, an investment plan will balance three objectives: capital growth, capital preservation and generating income.

Real estate

Real estate is an important asset class. If investors own their own home, they will have some exposure to real estate by default. If they don’t they should consider allocating part of their portfolio to the sector. Ideally, this should be done via a diversified fund to ensure liquidity.

Global diversification

Most investors invest too much of their portfolio in the country in which they live. As most of one’s expenses will be in their country of residence it is important to have a substantial portion of one’s portfolio in that country. However, it is wise to also hold foreign assets. Investing in foreign bond and equity markets helps to diversify risk and gain exposure to rapidly growing economies. Vanguard has suggested that an allocation of between 20% and 40% is reasonable for most investors. Furthermore, investors should limit the allocation to any single foreign market if that market is relatively small.

Life Cycle Investing

It is also worth considering market risk over the course of your career. The traditional approach to investing is to save a percentage of your income each year until you retire. But, this can leave you exposed to last decade risk. The problem is that you will be relying on the last decade of your career for most of the total returns you generate. If that decade happens to have low stock market returns, your overall retirement nest egg will not be enough. The solution is to try to invest more earlier in your career. This can be done by borrowing against assets, or by saving more.

How Logical Invest fits in with your Investment Plans

Logical Invest’s ETF rotation strategies are designed with a few key objectives in mind. The first is to move capital into assets with strong momentum. The second is to diversify risk across asset classes and sectors. And, the third is to hedge exposure during periods of rising volatility.

These strategies have a range of risk and return profiles. They can also be blended to generate a meta-strategy with the optimal risk profile for each investor.

If your primary objective is capital growth and preservation, you can manage the entire equity and bond portion of a portfolio using these strategies. Alternatively, you can also use the strategies alongside active and passive funds.

If you need to generate income, then you may need a separate strategy for that, using directly owned bonds, or ETFs with a focus on dividends and interest.


For most investors, bonds and equities will make up the bulk of their investment portfolio. Investors can use the Logical Invest strategies to effectively manage this portion of their portfolio. However, if your investment plans require it, you may require a separate strategy for income.

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NameCAGR 1y ▼
Leveraged Universal Investment Strategy58.9%
Maximum Yield Strategy45.3%
Volatility less than 15%38.4%
Max Drawdown less than 15%28.2%
Aggressive Risk Portfolio27.0%