Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

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Maria Kovass
Fixed Income Trader
Wintrust Investments

To reach any goal, I think we can all agree that it requires discipline. As I watch stories of the Olympians who are competing in the Olympic Games, I always admire their determination as they try to overcome all obstacles and win a medal for their country. While many of us do not likely aspire to reach that level of physical discipline, we may have a desire to reach certain financial goals. With that in mind, what level of financial discipline do you have?

One solution to consider is a unit investment trust (UIT). A UIT is a pooled investment vehicle in which a portfolio of stocks, bonds or other securities is selected by a sponsor and deposited into the trust. They invest in a fixed, unmanaged portfolio which is held for a predetermined amount of time. These portfolios offer several different investment methodologies, which can work to your advantage—especially when trying to stay disciplined and avoid making classic investor mistakes, including:

Chasing Returns. Studies have shown that investors tend to jump on the bandwagon when securities are doing well. Often times it is already too late to participate in the upside. Trying to time market swings may lead to increased volatility and below-average results.

Doing Nothing. We do not recommend making portfolio adjustments just because an asset class is out of favor, but hunkering down and refusing to make portfolio changes may drag performance results. It is important to reevaluate periodically to assure that your original objectives are still being met and quality companies remain in the portfolio.

Switching to Cash. Market recoveries happen quickly. You do not want to be sitting in cash when the rebound begins. We believe the patient, long-term investor who takes the opportunity to purchase high-quality undervalued stocks at discounted prices will be rewarded over the long-term.

UITs help investors avoid these common mistakes through discipline by removing the emotional factor from the decision-making process since everything is set for a certain amount of time. They also provide diversification which helps minimize investment risk. A UIT holds a number of varied bonds and related investments and buying a collection of investments is generally safer than buying a single investment. Finally, UITs offer consistency in that the diversified holdings of a UIT do not change which means you do not have to wait until you receive your quarterly statement to find out what was bought and sold.

To learn more about UITs and how they may benefit you, contact one of our Financial Advisors today.

 

Your Financial Advisor can help you determine which UITs match your needs and risk tolerance level. You should consider a trust’s investment objectives, risks, and charges and expenses before investing. Contact your Financial Advisor at 866.WH.DIRECT to request a prospectus which contains this and other information about a trust. Read it carefully before you invest.