Time Is Money: How Smart Investors Use Time to Build Wealth
In today’s dynamic financial environment, investors are faced with a number of choices and challenges. On the one hand, traditional portfolio construction often emphasizes asset class diversification and risk tolerance. At Branning Wealth Management, we take a different approach to solving the sustainable retirement portfolio dilemma: Liability Driven Investing (LDI) Matching , as we addressed in a previous article . Underneath the LDI framework is Time -Segmentation . This strategy, also known as time-based or horizon-based investing, allows clients to align their investments with the timing of their future financial needs.
Rather than managing a portfolio as a single block of money, time-segmentation breaks it down into time-horizons based on when the client will need to access funds. Each timehorizon is then invested into different kinds of stocks. We believe that this layered approach not only promotes growth over time, but also enhances financial security and emotional confidence during market volatility.
Understanding Time-Segmentation
At the heart of time-segmentation is a simple principle: match the investment time horizon to the asset classes that historically have been found to offer the best-worst case return scenario. A hypothetical time-segmented approach may include:
- Segment 1 (Years 0–3): Highly liquid and conservative investments to meet immediate cash flow needs.
- Segment 2 (Years 4–7): Moderately conservative investments for near-future goals, often using a blend of income-producing assets with slightly higher yield.
- Segment 3 (Years 8+): Growth-oriented investments in equities or alternative assets, positioned for long-term appreciation.
Benefits of Time-Segmentation
1. Provides a Clear Framework for Decision-Making
We believe time-segmentation simplifies financial planning by tying investment strategy directly to life goals and spending needs. Clients no longer have to make portfolio decisions in a vacuum. It helps them see how today’s investments are designed to support future outcomes.
2. Reduces Emotional Decision-Making
By structuring portfolios around time rather than risk, we believe research shows that clients are less likely to panic during market downturns. It helps when they can see that their near-term income is protected and not at the mercy of market volatility. We also believe this emotional insulation helps to foster disciplined behavior, one of the greatest determinants of long-term investment success.
3. Enhances Risk Management
Instead of relying solely on risk tolerance questionnaires, time-segmentation provides a more functional risk assessment—based on the actual timing of liabilities. For example, if a grandparent wants to pay for a grandchild’s college tuition, we can model the timing of this known expense by purchasing CD’s or bonds that mature in the years the tuition will be due.
Time-Segmented Approach for Retirement Planning
We believe that time-segmentation is particularly powerful for retirees. As clients transition from accumulation to distribution, their financial focus shifts from maximizing returns to maintaining predictable income. Because the focus often shifts from growing wealth to making sure income is reliable. With a time-segmented strategy, near-term income is already invested in more secure investments such as invest grade bonds, ii while longerterm funds remain invested for growth. This balance can make it easier to stay the course even during market ups and downs.
Empowering Clients Through Education
At our firm, we believe that understanding the risks and what could go wrong is just as important as maximizing performance. That’s why we educate our clients on timesegmentation as a foundation for financial planning. Through resources like Asset Dedication and our Modern Retirement Theory (MRT®) framework, we demonstrate how time-aligned investing can close the knowledge gap and put clients in control of their financial future.
Conclusion
At Branning Wealth Management, we believe time-segmentation is more than an investment strategy—it’s a philosophy of investment planning. It respects the reality of life’s timing and translates it into a portfolio structure that delivers clarity, confidence, and consistency. As more investors seek stability without sacrificing growth, timesegmentation offers a unique alternative that bridges today’s needs with tomorrow’s goals.
If you’re interested in matching your income to your expenses in retirement, we can help you explore if this strategy adds deeper meaning to your financial plan, get in touch with our team at Branning Wealth Management today.
Disclaimer:
This newsletter is distributed for general informational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. No part of this newsletter nor the links contained therein is a solicitation or offer to sell investment advisory services except where applicable in states where we are registered or where an exemption or exclusion from such registration exists.
Information throughout this newsletter is obtained from sources that we believe reliable, but we do not warrant or guarantee the timeliness, accuracy, or completeness of this information, and the information presented should not be relied upon as such.
The investment return and principal value of an investment will fluctuate. All investments involve risk of loss, including the possible loss of all amounts invested, and nothing within this newsletter should be construed as a guarantee of any specific outcome or profit. This newsletter may not be reproduced or redistributed in whole or in part.
Any opinions expressed herein are those of the author Kelly Jennings and may not reflect the opinion of any affiliates. Furthermore, all opinions are current only as of the date of the distribution to the intended recipient and are subject to change without notice. Branning Wealth Management, LLC does not have any obligation to provide revised opinions in the event of changed circumstances.
i This hypothetical time-segmented approach is a hypothetical example only. Branning Wealth Management will develop individual time-segmented investments for each client based on an analysis of the client’s intake paperwork and our discussions with the client as part of the on-boarding process and any changes discussed with us thereafter.
ii While investments in the time segment for current or near income are generally invested in highly liquid and conservative investments, all investing involves risk, including the potential loss of principal invested. Branning Wealth Management can not guarantee that investments will be secure.