How to preserve generational wealth despite economic uncertainty

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Despite economic uncertainty, it’s still possible to build and preserve generational wealth, experts said Thursday at CNBC’s Financial Advisor Summit.  

“There’s a real chance of a soft landing” for the economy, said Mel Lagomasino, CEO and managing partner of WE Family Offices, which has locations in New York City and Miami. “But I think we’ll still have an earnings recession,” she said, pointing to rising costs of labor amid worker strikes.

While rising interest rates have triggered stock market volatility, they have created competitive options for investors. “Now for a change, they’re getting paid,” Lagomasino said. “They can put money in very liquid, very safe investments and get 5%, 6% or 7%.”

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But through the end of 2023, “it’s going to be tricky, particularly with the geopolitical environment,” she said, urging investors to stay “very liquid.”

Biggest threats to generational wealth

With some experts still predicting a recession, experts at the summit said it’s also important to protect generational wealth.

“The No. 1 cause of great loss of wealth is concentration,” said Lagomasino, emphasizing the risk of having “a lot of eggs in one basket.”

The No.1 cause of great loss of wealth is concentration.

Mel Lagomasino

CEO and managing partner of WE Family Offices

Concentration risk was magnified in the tech community during the collapse of Silicon Valley Bank and First Republic earlier this year, said Rodney Williams, co-founder of SoLo Funds. “That effect was felt across so many different areas.”

That’s why “diversification is key,” he said.

Leverage is another big risk, especially when paired with excess spending, Lagomasino said. It can be a “toxic cocktail” for an investor who hasn’t diversified. 

“You can concentrate for a moment in time and then you diversify,” Williams added. “That’s the game.”  

Consumer prices rose 0.4% in September, more than expected
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