When markets get volatile, one of the most common investor questions is:
“Should I be doing something right now?”
At Strategic Income Group (SIG), the answer isn’t driven by headlines—it’s grounded in your financial plan. And that plan is designed with purpose: every dollar has a job to do.
Some dollars are invested to be spent soon. Others are positioned to grow over time. Understanding that difference—and investing accordingly—is what separates purpose-driven planning from traditional asset allocation.
We call it the SIG Investment Location Strategy (aka – “buckets”).
It’s how we help clients align each portion of their wealth with a clear purpose, timeframe, and risk profile—especially during times of market uncertainty.
Location vs. Allocation: A Smarter Way to Invest
Traditional financial firms focus on Investment Allocation—a static breakdown of your total assets across stocks, bonds, and alternatives in a single portfolio.
While allocation provides diversification, it often ignores two critical questions:
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When will you need each portion of your money?
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How much risk should each part really take?
At SIG, we focus on Investment Location instead. This means:
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Assigning each dollar to a time-specific financial goal
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Investing those dollars in a way that matches their purpose, risk, and timeframe
This approach offers clients clarity, flexibility, and greater peace of mind—especially when markets fluctuate.
The SIG Investment Location Strategy (Phase III: Strategic Income)
If you’re in the Strategic Income Phase, your portfolio is typically divided into four distinct “locations”:
12-Month Reserve
This includes funds earmarked for spending over the next year. Typically held in cash or near-cash equivalents, the focus is on liquidity and access—not return.
Income (2–4 Years)
Invested in shorter-term, high-quality fixed income, this location is designed to provide dependable income while minimizing volatility. This segment does not include private credit or equities.
Income+ (4–7 Years)
This location is also equity-free but has a slightly longer horizon. It includes longer-dated bonds, structured credit, and other fixed income strategies that aim for a modest increase in yield while maintaining capital preservation as a priority.
Growth (7+ Years)
Designed for long-term appreciation, this location may include equities, private equity, hedge strategies, and other alternatives. With a longer time horizon, this location accepts more short-term volatility in pursuit of long-term outcomes.
Explore the SIG Strategic Income Phase and Planning Framework
Strategic vs. Tactical Rebalancing: Two Disciplines, One Philosophy
At SIG, we use both strategic and tactical rebalancing to keep portfolios aligned over time.
Strategic Rebalancing
This occurs approximately once per year as part of your regular financial review. We assess whether each investment location still fits your needs, update cash flow projections, and realign any drift that has occurred.
Tactical Rebalancing
This is situational and driven by market dislocations, like those we’re experiencing now. Tactical adjustments are typically focused on the Growth Location, where long-term value and positioning matter most.
During periods of heightened volatility, tactical rebalancing allows us to:
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Trim overweight sectors or holdings
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Reallocate based on changing valuations
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Harvest tax losses where appropriate
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Shift between public and private assets based on risk/reward dynamics
Importantly, your near-term income and spending locations remain unchanged.
Why Rebalancing Matters: Historical Context
Rebalancing—done correctly—is one of the most effective tools in a long-term investment strategy. It’s not about reacting emotionally; it’s about staying disciplined.
Key benefits include:
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Preventing risk creep: Helps maintain a consistent risk profile over time
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Supporting “buy low, sell high” behavior: Rebalancing naturally encourages this
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Improving consistency: Studies show regularly rebalanced portfolios often achieve better risk-adjusted returns over timeÂą
During past downturns—such as 2008–2009 and early 2020—purpose-driven rebalancing helped investors recover more effectively than either reactive or passive approaches.
Also Read: Weathering Market Volatility – Why a Disciplined Plan Matters More Than Ever
What We’re Doing for Clients Right Now
For clients in the Strategic Income Phase, our Investment Committee is currently:
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Evaluating Growth Location holdings for tactical adjustments
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Reviewing valuations across equities, private markets, and hedge strategies
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Ensuring Income and Income+ Locations remain secure and properly aligned
Any changes we make will be deliberate, tax-conscious, and consistent with the long-term goals set in your plan.
For Phase II (Accumulation) Clients
If you’re still in the wealth-building phase, today’s volatility may present an opportunity.
We are evaluating:
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Strategic ways to rebalance into undervalued areas
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Whether it makes sense to deploy excess cash into long-term growth assets
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Options for dollar-cost averaging new contributions over the coming months
We don’t try to time the bottom. But we do believe that working disciplined rebalancing strategies into your long-term plan is one of the best ways to pursue results in uncertain markets.
In Summary: Purpose Over Panic
The SIG Investment Location Strategy ensures that every dollar is invested with intention.
It allows us to:
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Protect short-term income needs
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Stay agile in the face of changing markets
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Respond with clarity, not fear
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And focus on long-term results—regardless of short-term headlines
Rebalancing, both strategic and tactical, is how we keep your plan aligned with your purpose.
Next Steps
If you’d like to review your plan—or discuss how current market movements might impact your investment locations—our team is here to help:
Sources
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Vanguard: “Best Practices for Portfolio Rebalancing” (2020)
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Morningstar: “Investor Behavior and Goals-Based Portfolio Design” (2021)
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Strategic Income Group – Investment Committee Insights (2008–2025)
