10 Points to Investing for Financial Security 

Through market fluctuations, natural disasters and economic uncertainty, Northwestern Mutual has increased in strength and stability for 155 years by focusing on the long-term and remaining committed to mutual values. These values also are the foundation of the 10-Point Investment Philosophy that guides the retail investment products, programs and services we provide to clients like you.

10 Steps to Financial Confidence

Our 10-Point Investment Philosophy comes to life in daily decisions on everything from the investment vehicles your financial representative recommends to the investment research and Signature advisory programs supported by experts in the Northwestern Mutual Wealth Management Company. It is based on time-tested fundamentals and the financial discipline that are part of the process of helping clients meet their financial goals:

  1. Solve risk-based needs first. Your long-term financial security plan integrates insurance with investment products to ensure you are protected financially from unexpected life events such as job loss, disability, health issues or a long-term care concern. Life insurance, disability insurance and a strategy for handling long-term care events can help you address these risks without  tapping your other investments, such as retirement or college savings, to achieve your long-term goals.

  2. Provide expert guidance to help develop your long-term investment strategy. Enduring, long-term relationships that provide expert guidance for a lifetime of financial security are at the core of the Northwestern Mutual planning approach. We offer exclusive tools, such as the Personal Planning Analysis, and access to experts in areas including investments, annuities, business and estate planning to help develop the right plan for your specific situation.

  3. Create a strategy consistent with your risk tolerance, time horizon and goals. Working with your financial representative and using tools like the personal investor profile questionnaire, you define important factors that impact your overall approach to investing. This provides the foundation for deciding where your assets are allocated and the trajectory they are on.

  4. Determine a diversification strategy using asset allocation to meet goals. Once you’ve identified your risk tolerance, time horizon, and goals, it’s time to construct and diversify your portfolio. We follow asset allocation models based on your risk profile, from conservative to very aggressive, to guide the mix of stocks, mutual funds and fixed income investments recommended for you.

  5. Use professionally created, quality investment portfolios designed to match your asset allocation strategy. A variety of investment products are available through your financial representative to support your asset allocation strategy. Signature Advisory Programs, for example, combine a tailored investment approach, personal service and deep, professional wealth management advice. Our investment team analyzes, selects and oversees these funds.

  6. Use rebalancing to remove emotion from decision-making. Once we establish thresholds that are consistent with your goals and risk tolerance, regular rebalancing keeps your portfolio’s asset allocation in line with your risk profile and can help alleviate worry in the market’s trying times.

  7. Manage the impact of taxes and inflation. Our comprehensive approach offers strategies to address the impact inflation and taxes can have on portfolio returns. On the investment side, vehicles with different tax profiles, such as a Roth IRA, can help mitigate the impact of taxes. Life insurance is often used in estate planning to offset taxes and preserve the value of assets when goals include leaving a legacy.

  8. Evaluate the asset allocation relative to your long term goals and benchmarks. At least annually, you and your financial representative should reevaluate your financial security plan in light of any changing circumstances and adjust both insurance and investments to align with your current requirements and long-term goals.

  9. Resist the temptation to change your strategy during up or down market movements. It is human nature to want to make investment decisions based on emotion, especially in volatile markets, but compelling evidence shows that it’s best to develop a thoughtful asset allocation strategy and stick with it. This long-term view can help you stay on track through the market’s ups and downs.

  10. Start early, invest regularly and use dollar cost averaging. One of the most important factors in a successful financial security plan is consistency. Once you set the right course for your specific needs, continuing to invest over time and allowing your assets to grow is one of the best ways to meet your financial goals.

Even when markets are unpredictable, taking a long-term view and following a proven approach will set you on the right path to financial security. Your financial representative can show you how establishing a solid investment strategy and maintaining a long-term perspective can help you build endurance to reach your financial goals.

No investment strategy can guarantee a profit or protect against loss. All investments carry some level of risk, including the potential loss of principal invested. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor. Signature Advisory Programs are available through representatives of Northwestern Mutual Wealth Management Company®, Milwaukee, WI (NMWMC), a subsidiary of The Northwestern Mutual Life Insurance Company, Milwaukee, WI, and a limited purpose federal savings bank that provides fee-based financial planning, investment management, and trust services. Investment products and advisory accounts of NMWMC are not insured by the FDIC, are not deposits or other obligations of and are not guaranteed by NMWMC or its affiliates and are subject to investment risks, including possible loss of the principal amount invested.