^{By Todd Stankiewicz | CIO, SYKON Capital | Portfolio Manager, Free Markets ETF (FMKT)}


SYKON Capital builds dynamic asset allocation strategies for investors who may place a high value on risk management, liquidity, and flexibility. Below, Todd Stankiewicz outlines three investor profiles, business owners, pre-retirees, and retirees taking distributions, that may be especially sensitive to large drawdowns and changing market correlations.

One group that may find this approach relevant is business owners. Their company is often their largest asset, and that asset may be difficult to access quickly. The investment portfolio sitting alongside the business may serve an important liquidity role. If markets decline materially (Source: Bloomberg) and cash is needed for operations, family needs, or other obligations, the timing of those withdrawals can matter.

I also work with pre-retirees in the years leading up to retirement, when portfolio losses can have a greater effect on future spending plans. For clients already in retirement and taking regular distributions, market declines can be even more challenging because ongoing withdrawals may put additional pressure on the portfolio.

That dynamic is often referred to as sequence-of-returns risk1, which can be an important planning consideration for retirees and near-retirees.

The concern is not limited to equity market declines. As 2022 showed, there can be periods when bonds do not behave the way investors expect2. Dynamic asset allocation is one way to evaluate both drawdowns and changing correlations as part of a broader portfolio management process. The common thread across these investor profiles is that they may value a portfolio approach that emphasizes flexibility, liquidity, and ongoing risk assessment.

^{Past performance is not indicative of future results. This content is for informational purposes only and does not constitute investment advice.}

About the Author

Todd Stankiewicz | Chief Investment Officer, SYKON Capital

Todd Stankiewicz is the Chief Investment Officer of SYKON Capital, a fee-only registered investment advisor with offices in Westchester County, NY and Jupiter, FL. He is a recurring guest on Fox Business and the Schwab Network, where he discusses markets, portfolio strategy, and investor behavior.

Learn more at www.sykoncapital.com

^{Advisory services are offered through SYKON Capital LLC, a registered investment advisor with the U.S. Securities and Exchange Commission. This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable as of the date of this report. Past performance is not indicative of future returns, and diversification neither assures a profit nor guarantees against loss in a declining market. Investments involve risk and are not guaranteed.}