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Financial Planning Idea for the Day: Micro vs. Macro: Draft a Plan Before Moving Forward

Welcome to the 4Thought Financial Group ‘Financial Planning Idea for the Day’ video series, with our CFO and host, Martin Levine. This week, Levine shares tips on micro versus macro investment strategy options.

Levine recently sat down with a client looking for some investment advice, and a fairly common set of questions immediately surfaced. 

“Micro versus macro,” Levine begins. “Recently, I got a referral, and right away: What would you recommend for my investments? What would you recommend when I’m about to retire, and I have some money from my old retirement plan. Where would you put it? Where would you invest it?’”

 

“The lesson is to think macro and not micro.”

This was clearly a client looking for some quick answers to a few complicated questions. While both micro and macro policies have the same ultimate objective, their intermediate objectives are quite different. 

Thus, Levine provides a more calculated answer, stressing that all of the above speaks to the need to develop a plan before making any investment decision

“The answer is, I don’t know. The answer is part of a macro picture, part of the bigger plan,” Levine continues. “What’s your goals, objectives, time horizon, risk tolerance? All these really need to be addressed before any recommendations can be made.”

In summing up the lesson learned from this installment of “Idea for the Day,” Levine stresses that a macro approach is the best starting point, but not before that aforementioned plan is firmly in place. 

“So, that’s the lesson—the lesson is to think macro and not micro. Micro is only part of the solution,” he explains. “Macro is really where you have to start, and go to a firm that’s a fiduciary, like our firm, that works for you, that can do the plan objectively, put the macro into place, and then you could follow it, and you could implement it after that. But first you need the plan—plan first.”

 

Check back for the 4Thought Financial Group ‘Financial Planning Idea for the Day’ every week, as Martin Levine tackles frequently asked questions from clients spanning a wide range of topics, such as the importance of selecting the ideal life insurance company, understanding retainer fees, and maximizing older life insurance policies, among many others.

4Thought Financial Group is a Syosset, New York-based provider of Retainer Fee-Based Wealth Management services specializing in delivering the most effective financial planning solutions aligned with clients' lifelong goals.

Contact 4Thought Financial Group today, and let’s build wealth, together.

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