Being Strategic With Liabilities

Investors tend to focus on assets, but it’s often a good idea to include credit services and solutions in an investment strategy.

How can credit work as part of an investment strategy?

Although they may have never written it down, everyone has a personal balance sheet encompassing what they own (assets) and what they owe (liabilities). And while it’s natural for investors to focus on their assets, like stocks and bonds, it’s often a good idea to include credit services and solutions as part of an overall investment strategy.

Considering both sides of an investor’s balance sheet before making investment decisions is known as full balance sheet planning. To use this strategy effectively, it’s important to understand that:

  • When developing a plan to meet long-term financial goals, it can be helpful to consider how to invest assets—and how to use liabilities.
  • Proper liability management and the tactical use of credit may enhance an investor’s ability to meet financial goals.
  • Incorporating liabilities into an overall financial picture may assist in preserving wealth but also can magnify risk if not prudently managed.

To learn more, download your free guide on full balance sheet investment planning.

Download Our Free Guide (PDF)

Wells Fargo Investment Institute, Inc. is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.