Financial Navigation
From the Sea Scout program, I know it is important and useful to recheck and revisit navigational markers and reference points. The same goes for navigating financial markets and planning. More than 40 years of experience has shown me that chasing popular and highly publicized financial models and fads, extensively promoted by both sponsors and the news media, most often results in long-term disappointment. Recent “hot topics” lead me to reemphasize four of my “basics.”
Every Client Is a Unique, Indeed Exceptional, Individual. Nobody is a robotic automaton. “Robo-advisor” programs, which categorize the individual investor into mechanically proscribed asset allocation and investment selection, cannot compare with an individually tailored investment plan and portfolio.
Financial Markets and Financial Planning Involve Both “Art” and “Science.” Like medicine, quantitative science and qualitative analysis are intertwined and inseparable. Quantitative numeric models in isolation of qualitative subjective and experiential analysis are, in my opinion, a prescription for disappointment and loss.
Minds Over Money Do Matter. Active money managers are capable of selectively taking profits on individual issues and selectively selling to try to preserve the integrity of a portfolio when raising cash to suit investor redemption demands. This is part of what I try to suggest to you for your portfolios with me. “Passive” investment structures are incapable of this. In my opinion, they can look good in a rising market environment, but what about a “bear” market? Many passive issues have not been tested by a serious market pullback.
Big Oak Trees Grow From Little Acorns. Some investment firms have recently announced plans to shun and reassign smaller accounts, particularly IRAs, to generic institutional service centers. Most folks’ portfolios start small (mine certainly did) and grow over time. Our absolute commitment, and that of our firm, is never to abandon any client due to smaller account size, relegating them to an impersonal and possibly inexperienced call center.
I hope you find this “reality check” useful. Please contact us to discuss these concepts further as well as your individual needs, goals, and investment circumstances.