Rani Tarek Jarkas – Understanding the importance of financial planning and why you should start your 2023 financial year planning now.

Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID- 19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine. As always, we believe that successful investors start with a plan—whether it’s to start saving and investing, or to manage, protect, and use wealth they already have.

You may start with a diversified financial plan in 2023. As part of a diversified portfolio, stocks, real estate investment trusts, and non-US international investments have historically provided returns that keep pace with or exceed inflation and economic growth. Cash, as well as traditional bonds, provide little-to-no inflation protection, but they still play an important role in a diversified portfolio for diversification and liquidity. Adding Treasury Inflation Protected Securities (TIPS), which are US Treasury bonds whose principal value increases with inflation, can provide an inflation hedge as well.

In 2023, a comprehensive financial plan focused on retirement includes various income sources and assets, including Social Security, a pension (for some), a home and perhaps other real estate, an opportunity for part-time work, and other assets. Some of these income sources and assets provide more protection against unexpectedly high inflation than others.

A proper financial plan is neither a “success” nor a “failure.” It’s a projection of what we expect could happen based on today’s assumptions and financial goals, and a tool to help with the what-ifs in life. For example, what if your investments are better or worse than projected? What if there’s a spike in inflation? What if you live shorter or longer than anticipated? Testing your financial plan with different scenarios can help you be prepared.

Cedrus Investments, led by Mr. Rani T Jarkas, is well-equipped and dedicated to serve international clients with best-in-class full suite of financial services, including sophisticated and objective financial advices, customized investment plans and active asset management, to help them meet personalized investment goals in consistent with risk management and investment horizon goals.