Navigating Investment Decisions: The Art of When to Sell

The figure of the worker reveals the truth underneath what is shown (Buy/Sell)

Investing is complex, and the decisions that are made ‘behind the curtain’ can be mystifying. That’s true no matter how long you’ve been an investor or the size of your investment portfolio. So it’s no wonder that one of the most common questions I hear from my clients is this: “How do you determine the right time to sell my investments?” It’s an important question, both because selling (and buying!) is vital to your long-term financial health, and because understanding the process can be incredibly empowering.

The decision to sell investments—which in our practice primarily includes ETFs (Exchange Traded Funds) or Mutual Funds—typically comes down to a two fundamental strategies:

  1. Rebalancing to address your investment goals The first strategy is rebalancing. This is a fairly straightforward process that includes selling certain assets to ensure your portfolio adheres to specific allocation targets. Our goal here is to balance the risk and return of your portfolio; if an investment grows to the point where it skews the preferred balance, we trim it back. For example, if your target asset allocation is 60% stocks and 40% bonds, but after a strong year in the stock market, your stocks may now represent 70% of your portfolio. We would then sell off some of your stock holdings and purchase more bonds to bring your portfolio back to the desired 60/40 split. This disciplined approach ensures that your portfolio remains in line with the strategic asset allocation that aligns with your investment goals.
  2. Continuous evaluation for informed adjustments The second strategy is more nuanced and requires ongoing assessment. We continuously review the performance of the funds we hold against their objectives and peer performance. (For those who invest through Schwab, tools for this analysis are readily available at Schwab.com under the research tab.) For instance, if a Mutual Fund in your portfolio was chosen for steady growth but has been consistently underperforming compared to similar funds in the market for the past year, we would consider this a signal that it may no longer fit our investment strategy. We then use our research to find a better-performing alternative that meets our criteria. This regular, detailed evaluation helps us keep your investments aligned with the most current market data and our strategic vision for your portfolio.

This process-driven framework is vital to our investment process. It may surprise you to learn that, in fact, having a consistent process of any kind has been shown to be more important to long-term success than the individual strategies themselves. This is because the universe of investments is in constant motion, with different asset classes taking the lead at different times. A robust, data-informed framework allows us to weave together economic data and historical market insights and make well-founded decisions—without the pitfalls that come with chasing market trends.

Active and Passive Management: Striking the Right Balance

In general, our client portfolios hold a limited number of individual stocks, favoring a blend of active and passive investment strategies instead. (The exception may be when a client has previously invested in or inherited a certain individual stock that we feel is beneficial to the portfolio.) Active management lets us invest in targeted themes through fund managers with proven expertise. Passive management involves investing in broad market indices through ETFs or Mutual Funds, providing wide market exposure with lower costs. This combination helps us to allocate assets effectively among the best managers and investment themes, aiming for the best possible risk-adjusted returns within the themes we believe in.

As your advisors, we apply these important strategies throughout your investment journey—from when you are just beginning to save and invest for retirement, to when you have hung up your white coat for good and are reaping the rewards of your career. Our consistent, policy-driven framework is key to helping you grow and protect your wealth at every step along the way.

Do you have other questions about the decisions we make ‘behind the curtain’ to help you reach your financial goals? Please ask! I’m happy to provide my answers in a future blog post. I expect your fellow Partner Physicians will appreciate the insights as well!

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Roth conversions for Partner Physicians: strategy is the key!

"Retirement" is printed on a torn piece of paper that is inserted into the coin slot of a pink piggy bank against a blue background.

Roth conversions can play an important role in every Partner Physician’s retirement income plan. The key to success, however, is creating a strategy that takes the nuances of the Common Plan into account to gain the greatest possible benefits from this tax-wise investment tool.

Roth IRAs are a unique type of retirement savings account that allows contributions to be made with after-tax dollars. The significant advantage of these accounts is that, under current U.S. tax laws, qualified distributions from Roth IRAs are completely tax-free in retirement, including both the original contributions and any accumulated earnings. Distributions are also tax-free, which is true for heirs of the account as well. An added bonus: Roth accounts are not subject to Required Minimum Distributions (RMDs), giving retirees greater control over how and when they choose to use their assets.

The downside of a traditional Roth IRA is that the income eligibility requirements for these accounts prohibit most Partner Physicians from contributing at all. In 2026, single tax filers must have a modified adjusted gross income (MAGI) of less than $153,000 (phased out between $153,000 and $168,000), while married tax filers filing jointly must have a joint MAGI of less than $242,000 (phased out between $242,000 and $252,000; no contribution at $252,000 or more).

That doesn’t mean, however, that all is lost! After separation from the partnership (retirement or early retirement), Partner Physicians can benefit from the tax-free growth of a Roth account by completing a Roth conversion—a transfer of assets from a traditional retirement account (which offers tax deductions on contributions but is taxed on withdrawals) into a tax-advantaged Roth IRA. Using this conversion strategy, taxes are paid on the amount converted, but the funds in the Roth IRA grow tax-free and can be withdrawn tax-free in retirement (provided certain conditions are met).

Making a Roth conversion work for you requires a strategy aimed at reducing the amount of taxes paid at the time of the original contribution. This is particularly important for Partner Physicians. Here’s why:

  • It is likely that you will be in a higher tax bracket during your earning years than in retirement. This is because as your income increases, so does your tax bracket, so a larger portion of your income is taxed. In retirement, your income is likely to go down, placing you in a lower tax bracket and reducing the percentage rate you are taxed on your income.
  • However, as a Partner Physician, you will receive a return of your ownership stake (sometimes referred to as the Common Plan or Pension) as an annuity in retirement. This valuable benefit will raise your earnings in retirement—and your marginal tax bracket. This means that you will pay a higher percentage in taxes than most retirees.
  • Because it is most beneficial to make a Roth conversion when your marginal tax rate is lowest, delaying your common plan/pension payments in your first year of retirement may be advantageous, allowing you to make a large, one-time Roth conversion at a much lower effective tax rate.
  • You may also want to consider using a ‘topping off tax bracket strategy.’ This involves making Roth contributions up to the threshold of the next-highest tax bracket for multiple years. (If you do this after age 63, keep an eye on the Medicare income tax tables as higher-income retirees must pay a Medicare surcharge the year after they have high income.)

By paying close attention to the tax implications of Roth contributions and balancing your withdrawals from taxable retirement accounts like traditional IRAs with tax-free withdrawals from a Roth IRA, you can better manage your tax burden in retirement. As well, because the funds in your Roth account are taxed at the time of contribution and not after, a Roth account offers added protection against the potential of rising tax rates in the future.

Contact to our team today to create a personalized plan that puts Roth conversions and other powerful retirement tools to work for you.

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Planning for Joy

joyful balloon family.

Joy isn’t a concept that many people pair with financial planning. It’s no wonder. We live in a society that seems hard-wired to believe that money can’t buy happiness. But as someone who spends my days helping individuals and families work toward their financial goals, my perspective is quite different. Based on my experiences with clients young and old, I know for certain that using your financial resources to fulfill your dreams is all about joy.

Over the years, I’ve helped clients plan and budget for many things. Dream vacations for their families. New homes and gorgeous remodels. A collector car that had been a fantasy since childhood. Beautiful weddings and amazing Bar Mitzvahs and Bat Mitzvahs. Once-in-a-lifetime gifts. Some of these things were extravagantly expensive. Some cost much less than the client expected. No matter the price tag, when I saw that big smile afterward, I knew that the planning we did together delivered real joy.

Of course, getting to that point takes careful planning. ‘Financial hygiene’—the budgeting, investing, and saving to be sure your fundamental financial needs are met—must come first. But once your home is secure, your retirement is on track, college is covered, your taxes are paid, and you have a plan and sufficient savings to cover any unexpected, uninsurable expenses, the fun can begin. That’s when planning for joy becomes a reality. And it’s when I get to ask one of my favorite questions: “What brings you joy?”

What’s fascinating to me is how challenging that question can be. Most of us spend so much time accumulating wealth that it can be difficult to start thinking about spending some of what we’ve gained. I’m no longer surprised when a client tells me it’s hard to focus on their own joy. Or when they confess that they’d been too scared to plan a big trip or make a major purchase because they didn’t realize they could afford it. Or when they tell me they’d been so focused on building their wealth that it never occurred to them to focus on something as simple as joy.

These challenges are especially common for Partner Physicians who entered medicine to help others. While their service to the community is selfless and amazing, I often see signs of pre-burnout and burnout. When I do, I urge them to think hard about what brings them joy and to actively seek things that can bring them long-term happiness, deeper relationships with family and friends, and the strength to continue to serve their patients with passion.

I know these conversations can be hard at first, but as each client gets more comfortable with the idea, I can see their mind begin to shift and their imagination start to take off. Soon, they are actively talking and dreaming about the idea of joy during our planning meetings. Before you know it, we are laying out a budget and making plans to help make a dream come true.

Financial advisors are not just architects of wealth, but enablers of joy. We listen. We watch for what makes your eyes light up. We strive to understand your passions. Then, we connect the dots between financial planning and the pursuit of your own joy and well-being. Money can’t buy everything, but it can help you create an environment where happiness is much more likely to flourish and thrive. That’s what planning for joy is all about.

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When a physician asks: “When can I retire?”

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How the Common Plan helps protect your financial future

Piggybank protected under a glass dome on blue background

If swings in the stock market have you wondering how protected your retirement portfolio is today, here’s some news that may ease your mind: as a Partner Physician, your pension, often called ‘the Common Plan’ or the ‘Partnership Pay-out’, can work wonders at safeguarding your financial health—even during the wildest market volatility.

Though every Partner I know is aware of this valuable benefit, very few of those I speak to understand the role it plays in their investment strategy. Whenever a market rollercoaster comes into play (as it always will), many have asked me about the plan and its role in their financial big picture. Three of the most common questions I’ve heard are: “How should I plan for this big chunk of my savings?” “Should assets in the Common Plan be considered when deciding the asset allocation in my portfolio?” “And if so, how exactly should those assets be weighted?”

These are great questions, so be proud of yourself if you, too, are asking them. If you’re thinking about how your pension fits into your strategy, it means that you understand the importance of portfolio diversification and balancing high- and low-risk invested assets, and that you’re focused on the right things when it comes to building long-term financial wealth.

The best explanation of how a guaranteed pension should be strategically positioned in a retirement portfolio comes from one of America’s most legendary investors, John ‘Jack’ Bogle, the founder of Vanguard and inventor of the very first index mutual fund for investors. Bogle has suggested that the best way to view Social Security, sometimes referred to as a public pension, is like a bond that’s been bought and paid for. Bonds, of course, are considered an important safety net in any investment portfolio because they offer a fixed rate of interest that guarantees income in the future, regardless of the ups and downs of the stock market. Bogle goes on to suggest that guaranteed income provided by Social Security should be built into the investment strategy as part of the bond allocation.

Though there are certainly differences between Social Security and pensions (including a significant difference in value!), Bogle’s advice applies here as well. Your pension is similarly insulated from market risk, so it may be wise to view some or all of those assets as bonds when balancing risk in your portfolio. Because your ‘bonds bucket’ is pretty full, allocating more assets to higher-risk equities may offer you greater opportunity for growth—without giving up your retirement safety net. Note, too, that if you have a written financial plan from a CFP® (and I hope you do!), the assets in your Common Plan are probably already incorporated into your Retirement Cash Flow Projection, and even stress tested to help ensure you have the highest percentage chance of retiring when you choose, not when the market tells you that you can.

A volatile stock market can give any investor the jitters. Luckily, your pension puts safety on your side. Even so, the most important thing to do during any market downturn is to stick to your written financial plan. In more wise words from Jack Bogle, when the market tempts you to change your strategy, “Don’t do something, just stand there!”

Hopefully that answers your questions. If not, please reach out. I’m happy to walk you through the details and take a closer look at the potential impact of the current market on your retirement plan, including how your pension can help smooth the path ahead.

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Active? Passive? Here is a third option for wise investors

Wooden signpost with two arrows and black words on them.

The ‘Active vs. Passive’ debate has long been one of the most contentious topics among investors. Advocates of active investing believe (strongly!) that hand-picking individual stocks in a portfolio is the only way to go. In contrast, those who subscribe to a passive investing model believe (just as strongly!) that the best path to growth is investing in a large group of diverse stocks and then relying on the law of large numbers to drive growth. But what if I told you there was a third option—one that combines the best of both of these approaches to provide a more balanced approach to investing?

It’s intriguing, right? But before we go there, let’s start with a little investing 101. The Active vs. Passive debate is complicated, and unraveling the two requires some understanding of how each approach is executed.

What is ‘passive investing’?

At the highest level, ‘passive investing’ is a buy-and-hold strategy that relies on minimal trading and usually aims for long-term growth. The most popular passive funds track the S&P 500 index—a group of stocks that includes, with a few exceptions, the 500 largest stocks in the United States. As a result, these funds hold larger amounts of bigger companies, or what are called ‘large-cap’ stocks. For example, the largest holding in a passive fund tracking the S&P 500 today would be Apple, which accounts for 7% of the Index, and the smallest holding would be Xerox, representing 0.01% of the S&P 500. Passive investing is typically cheaper, and is certainly less complicated.

What is ‘active investing’?

In contrast, ‘active investing’ is a more hands-on approach that typically relies on more frequent buying and selling based on the insights of a portfolio manager (and, in the case of most funds, a staff of researchers). Active investors often seek to ‘beat the market’ by trading often to take advantage of short-term changes in stock prices. Active funds rely on a research staff to predict what stocks will do better over the short and medium term, and to decide the quantity of each stock to be held at any given moment. The goal is worthy, but active investing has historically underperformed passive investing over many time periods, largely because 1) research staffs are expensive and, 2) as Michael Mauboussin writes in The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing, “Investing is dominated by luck, because investor skill level has risen to the point where the market is largely efficient.” In other words, no matter how hard they try, researchers and portfolio managers may not be able to deliver better results than the efficient capital market.

Some economists have speculated that an active approach to investing offers added value in a crisis. However, a paper from Professor Lubos Pastor from the University of Chicago analyzed how active and passive approaches performed in the market downturn caused by the COVID pandemic. The research found that this ‘value add’ was nonexistent, on average—and that 54% of active management did not beat their benchmark. In other words, to succeed at ‘beating the market,’ active managers must be very (very!) good at picking winning stocks.

So… what’s that third option?

Wise investors may want to consider a third option: ‘factor investing.’

Factor investing focuses on identifying the common attributes of companies whose stocks do better over time. These factors include things such as having low amounts of debt or maintaining consistent profitability. Other factors that may be considered include market cap, credit rating, stock price volatility, and growth vs. value. You can think of factor investing as a sort of middle ground between active investing and passive investing. Like active investing, it requires portfolio managers to pick stocks based on available information (in this case, the factors that are associated with performance). Like passive investing, it offers diversification and view toward longer-term growth. Importantly, Professor Pastor’s research found that 60-80% of active funds did not beat various combinations of factors. In other words, factor investing outperformed active investing—by a long shot.

The great news is that factor investing has become much more accessible over the past 20 years. Many low-cost Exchange Traded Funds (ETFs) and mutual funds make it easy to take advantage of factor investing—including some that are on the Schwab menu for the KP Keogh and 401(k). Working with an advisor can expand your options to include almost any ETF traded on the American Stock Exchange. While factor investing has “historically provided higher returns than market-based strategies” (see 3 Factor Investing Myths), it is no silver bullet, and it isn’t right for every investor. I’m happy to help you identify the most appropriate investment approach based on your asset allocation and risk tolerance (and don’t be surprised if factor investing finds its way into the mix!).

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Risk Parity: Managing risk within partner physician portfolios

Umbrella is protecting a piggy bank on blue background.

The term ‘risk parity’ isn’t something most physicians come across often (or, let’s be honest, ever). But for financial advisors, risk parity is a tool that is just as important and familiar to us as your stethoscope is to you. A stethoscope gives you the information you need to determine if a patient needs treatment. Risk parity gives our team at Soaring Investment Management the information we need to determine if your portfolio needs treatment. Of course, we’re not prescribing medications or other healthcare strategies to make your portfolio ‘well.’ Instead, we use the information provided by risk parity to maintain the health of your portfolio over the long term.

What is risk parity, exactly?

Risk parity is a portfolio allocation strategy that uses risk factors to determine the most appropriate allocations of various asset components within your investment portfolio. Risk parity strategies (there are many) use modern portfolio theory (MPT) to help optimize—and hopefully maximize—your expected return while assuming a certain level of market risk. (Remember, returns are your reward for taking a measured amount of investment risk.) In a general sense, risk parity attempts to neutralize some of the risks of investing that go hand-in-hand with market timing.

Market timing, of course, is the process of attempting to buy assets when they are cheap and sell them when they’re expensive. In the short term, many investors would agree that this is a pretty tough way to make money. However, risk parity helps smooth the process of market timing by taking steps to overweight assets that are cheap (as measured by multiple metrics), and then slowly shift the investment into other assets by selling those once-cheap assets as they become more expensive over time. Rather than relying on a static equation—such as the standard rule of thumb of 80% equities and 20% bonds, for example—risk parity considers a much broader group of assets and alternative strategies to attempt to achieve optimal outcomes. It’s a strategy that many investors find very useful, including Bridgewater, the world’s largest hedge fund, which credits much of their success to risk parity strategies. (If you want to learn about the technical details and benefits of risk parity, this white paper from Bridgewater is a great primer.)

How can risk parity help strengthen my portfolio?

At Soaring, we use a variety of strategies to help partner physicians seek better outcomes in their individual portfolios. Often, the approach we find most beneficial is a risk parity model. Since different types of assets tend to change in price and value throughout each market cycle (which typically lasts about 10 years or so), risk parity allows us to track and manage the assets in your portfolio at any given time based on the current level of risk for each asset class. Risk parity helps us determine when to buy and when to sell based on larger market trends.

Risk parity also supports the retirement planning process. Like most partner physicians we work with, you are probably investing primarily to maintain your lifestyle after you retire. By incorporating risk parity strategies into your retirement timeline, we can more easily protect your assets from the wrong risk at the wrong time. For example, a risk parity model might identify growth stocks as an ideal opportunity when you are in your late 40s and have a decade or more to grow your assets. However, in the year or two leading up to your retirement, the model might identify this same asset class as too risky because the chance of those assets losing significant value in the short term may be higher. Based on your timeline, the model may suggest reducing the percentage of growth stocks in your portfolio to reduce your risk at a time when a major loss could have a greater long-term impact on your wealth.

Putting risk parity to work for you

Risk parity strategies are most effective when applied to portfolios that include a highly diversified set of assets with a very low correlation (meaning that the asset classes typically behave differently in various market scenarios). The more asset classes there are in the equation, the easier it is to find those that are cheap, identify those that are getting expensive, and shift the portfolio appropriately. It’s just one more reason why expanding your ‘menu’ of assets and creating a well-balanced and diversified portfolio is so important.

Diversification should always be a priority for investors who want to minimize risk. Working with a financial advisor who offers access to a much larger group of assets than what is found in your employer-provided plan is the easiest way to increase the diversification of your assets—and to take advantage of risk parity strategies that can help you buy low and sell high with as little risk as possible. If you’re ready to take that next step, please reach out. As always, we’re here to help!

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