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Building Tailored Portfolios for Clients - Isn't Performance ALL that Matters?

At Fiduciary EDGE Advisors, we are fortunate to have access to a comprehensive suite of investment solutions to meet the diverse needs of our clients. As an independent advisory firm, we can choose from virtually any investment vehicle we feel is the best fit for our clients, rather than a narrow list of choices available at some financial institutions.

Our commitment is to deliver customized investment strategies that align with each client’s unique financial goals, risk tolerance, and need for liquidity. This means carefully screening investment possibilities among an extensive list of options to identify the most suitable.

But shouldn’t we just pick the highest-performing investment every time? Not necessarily, our due diligence and selection process involves going much deeper than just picking the latest hot investments. This process involves analyzing a myriad of qualitative and quantitative factors before choosing a solution to implement.

Before diving into our screening methods, it’s important to emphasize that performance is a key factor in our evaluation process. We naturally seek high returns, however, high returns must also show patterns of consistency and align with acceptable risk levels. In investing, risk and return are inherently linked, and we work diligently to ensure that historically strong returns are not driven by taking excessive risk. We have all heard that past performance does not guarantee future results, so last year’s hot investment is not guaranteed to continue its stellar performance again this year – called “performance chasing, ” while tempting, has not proven to be a successful strategy over time.

Here are the primary factors we evaluate during the investment screening process:

• Performance: Again, we look closely at performance in investments, but consistency of returns is very important to us. Strong consistent performance is preferrable to investments that may have good long-term average performance but have wild swings along the way.

• Risk Measurements: Understanding the level of risk associated with an investment is critical. We analyze several risk metrics to assess if an investment is delivering good risk adjusted returns or if it is taking large risks in the hopes of big payoffs.

• Investment Fees: We strive to find cost-effective solutions for portfolios. With such a wide range of investment vehicles now available, we often find multiple options to consider.

• Tax Sensitivity: For clients with specific tax considerations, we strive to select investments that help minimize unnecessary tax burdens. While strong returns can generate taxable gains, which is a good problem, we work to minimize large taxable events whenever possible.

• Investment Manager Due Diligence: This includes the 3 P’s of manager evaluation– Philosophy, People, and Process – which are essential to understanding the quality and consistency of an investment manager's style.

• Philosophy: Does the manager's approach align with long-term value creation and fit with a client’s objectives? In looking at their past performance, are they disciplined in adhering

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Planning for Retirement:

Strategies for Women

Women face unique retirement challenges like longer life expectancies and career breaks, which can impact financial security. Here are four key strategies to help:

1. Social Security Timing

The age you claim Social Security significantly affects your benefits. Delaying until your full retirement age—or age 70—can maximize your monthly income. Married or widowed women should explore spousal and survivor benefits to optimize payouts. Consult a financial advisor for personalized guidance.

2. Plan for Longevity

With women living longer on average, it’s essential to prepare for extended healthcare needs and inflation. Estimate future costs and consider long-term care insurance to protect against unexpected expenses. Planning ahead turns longevity into an advantage.

3. Maximize Retirement Contributions

Career breaks often result in gaps in savings. Offset this by maximizing contributions to 401(k)s or IRAs, taking advantage of employer matches, and utilizing catch-up contributions if you’re over 50. Automated savings ensure consistency.

4. Work With a Trusted Advisor

A tailored financial plan helps balance immediate needs with long-term goals. Advisors can analyze your finances, create a personalized strategy, and guide you through complex decisions like investment risk and income planning.

By addressing these challenges proactively, women can take control and build a secure retirement future.

Here are some easy planning steps you can take

to start the new year on a strong financial footing.

• Organize financial records (purge and file).
• Review average monthly spending.
• Maximize retirement contributions: Contribute to your 401(k), IRA, or other retirement accounts by year-end.

NOTE: IRA contributions can continue until 4/15/25 or when you file your return, whichever is first.

• Max out HSA accounts. Spend down FSAs that can’t be rolled into next year.
• Tax-loss harvesting: offset gains by selling underperforming investments to reduce taxable income.
• Charitable contributions: Make donations by December 31 to qualify for potential tax deductions.
• Update beneficiaries: Ensure estate documents and account designations are up to date.
• Change passwords: for log ins on financial websites.

Call or email Jayne Di Vincenzo CFP® if you have questions on any of these tips.

GIFT IDEAS FOR THE YOUNG PEOPLE IN

YOUR LIFE

This holiday season, consider pairing financial conversations with a heartfelt gesture, like a book on financial literacy or a family game that teaches money management.

These small steps can plant the seeds for a lifetime of financial confidence and success—truly a gift that keeps on giving.

Gifts for Kids and Teens

Savings Accounts:

• Open a high yielding savings account. Fiduciary EDGE Advisors clients and their families have access to a no-fee, FDIC-insured, high interest account with no minimums via our relationship with Goldman Sachs Private Bank. Or consider a local bank or credit union and make an initial deposit. Some banks offer youth accounts with incentives for saving.

Educational Games:

• The Game of Life: A classic board game teaching kids about life decisions and finances.
• Monopoly (or Monopoly Junior): Great for understanding concepts like budgeting, investing, and managing assets.
• Cashflow for Kids by Robert Kiyosaki: Designed to teach kids about investing and financial independence.

Books for Young Readers:

• Money Ninja by Mary Nhin: A fun, engaging introduction to money basics for children.
• Finance 101 for Kids by Walter Andal: Covers budgeting, saving, and investing in an age-appropriate way.

Books for Young Adults:

• I Will Teach You to Be Rich by Ramit Sethi. A six-week program for managing money, covering topics like budgeting, investing, and automating finances. The tone is fun and conversational, perfect for younger readers.
• Rich Dad Poor Dad by Robert Kiyosaki. A classic that contrasts the financial philosophies of Kiyosaki’s two father figures. Emphasizes financial education, investing in assets, and thinking

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Continued: Isn't Performance

ALL that Matters?

to their stated investment philosophy or are they prone to style drift and performance chasing?

• People: Are the professionals managing the investment experienced, ethical, and consistent? Additionally, is there stability on the investment management team or are there indications that the investment team experiences high turnover? When key personnel leave what succession plans are in place to ensure the investment process will continue operating effectively?



• Process: Is the investment process being utilized repeatable and disciplined? Does the investment or investment manager have systems and procedures in place that support their investment process and who has the responsibility of monitoring these activities?

This is a glimpse into the factors we consider when choosing investments, and by integrating these considerations into our process, we strive to deliver solutions that are not just high-performing but also resilient over the long term, cost-effective, and tailored to each client’s unique needs. This approach reflects our unwavering Fiduciary commitment to helping clients Journey Confidently® toward their goals.

• Mark Miller, CFP®, APWA™

Content is not intended to provide specific financial advice. You should consult your financial professional, attorney, or tax advisor with regard to your individual situation. Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Fiduciary EDGE Advisors, LLC is not affiliated with Kestra IS or Kestra AS. Kestra Financial 5707 Southwest Parkway Bldg. 2 Ste. 400, Austin, TX 78735

Investor Disclosures: www.kestrafinancial.com/disclosures