Tax Reform & Portfolio Protections

by Michelle Smalenberger, CFP® / October 10, 2017

What kind of news have we heard this past week that is impacting the financial markets?


financial design tax reform and portfolioFirst, we’ve seen progress toward tax reform. The House of Representatives passed the 2018 Fiscal Budget which will now move to the Senate for a vote. This step has to happen in order for overall tax reform to be put into place. Although there are still many hurdles to overcome, we are optimistic that tax reform will happen, maybe even in 2017. Read this step-by-step explanation from CNBC.


While we are seeing progress on the economic front, we are also, unfortunately, seeing progress on a geopolitical front with North Korea. While the war of words continues to heat up, behaviors by both countries lead many to believe military action is inevitable.

This past week, Kim Jong Un named his sister as part of his inner political circle. Could this be because he only wants those he can completely trust around him? Time will tell.


With so much unrest around the world, we are reminded of the importance to have investments in your portfolio that serve to protect. Investments like cash, U.S. Treasuries, and real estate tend to perform well in a down-market while also performing well in a good-market.

One problem for many investors is that investing directly in these types of holdings is not available in your employer-sponsored retirement accounts like 401(k)’s, 403(b)’s, and Thrift Savings Plans. Instead, you can only choose from target-date retirement, bond, or equity funds.

So how can you protect your portfolio without access to investments you need?

You should review your investment portfolio in its entirety, meaning the accounts owned personally and the retirement plans through work. Decide which accounts will hold what investments so that everything is working together. No duplications or contradictions but all your investments work in unison towards your goals.

Since most employer-sponsored retirement plans don’t allow you to hold cash, you could hold a percentage in your other personally-owned accounts. Not only can this help your portfolio allocation, but it will also provide a source of liquid funds in case of an emergency.

In order for you to continue to make progress toward your goals, it’s important to have funds saved inside and outside of retirement accounts. And continue to stick to your diversified investment approach so you can weather all types of markets.


Financial Design Studio Video RMD


Ready to take the next step?

Schedule a quick call with our financial advisors.

Recommended Reading

Wealth Management Financial Advisors in Lake Zurich Illinois on Economic Paradoxes

Navigating Economic Paradoxes

Stock markets and the economy face high levels of uncertainty in 2024. Many economic indicators seem to contradict each other, such as strong economic data just as markets price in aggressive policy easing by the Federal Reserve. We review the key indicators we're watching closely to help us navigate these economic paradoxes.

Wealth Management Financial Advisors on How to set your kids up for success

Podcast Episode 36: How to Set Your Kids Up For Success

In this episode, we interview Anna Lewis as she shares the opportunities her parents gave her and how they shaped who she became.

Michelle Smalenberger, CFP®

I have a passion for helping others develop a path to financial success! Through different lenses on your financial picture, I want to help create solutions with you that are thoughtful of today and the future. I have seen in my life the power of having a financial plan while making slight changes of direction from time to time. I believe you can experience freedom from anxiety and even excitement when you know your finances are on track.