By Change is in the air in the world, but our approach stays steady.
We’ve had several new clients come on board recently, and I always hear a few new questions from folks as we start our relationship and planning process. “Alan Greenspan was just on the radio saying we’re heading towards another bubble,” one client recently told us. “What do you think, and how should we protect ourselves?
First, as I like to say, Alan Greenspan successfully predicted 12 of the last 3 recessions. And there’s a big difference between us as financial planners and the talking heads on TV and in other media. We have to sit down with you and let you know what’s actually going on, and talk about whether we were right or wrong. Sometimes that means we flap our tail feathers a little, and sometimes that means we eat crow.
When we make bold statements, unlike those talking heads, we know we’re going to have to be held accountable. After all, we’re investing real money into those theories. When we’re right, it puts you on a trajectory to get you closer to retirement, and when we’re wrong, well, it doesn’t help your retirement plans. Our goal is to be right much more often than we’re wrong, so that overall things will turn out okay. It’s your hard-earned money, and we all want to see it grow.
Another new client called me up from the car recently and said, “I feel better now that my portfolio has rebounded from the early 2016 lows, but I still don’t want to put money in the markets or add to my investments because I’m worried about this election.”
Folks, when the markets were off 12 to 17 percent earlier this year from the May 2015 highs, I know that Alex, Brandon and I advised you in blogs, in passing conversations and in quarterly meetings that it was a great time to buy. Well, we just tallied up how many of you actually did that, and to the 10 of you who did put new money into the markets, congratulations. I’ve seen reports of average gains of 20 percent and higher on that new money. Well done – not bad for a five-month return.
We had a second group of folks who, as we do with most of you, had some cash in their portfolios. Many of these clients told us that while they didn’t feel good about things, they trusted us and approved our recommendation to use some of that cash to buy high-quality, dividend-paying stocks and positions in energy investments. Your gains on those new buys are between 20 and 28 percent. It’s looking like it was a good time to add money to the market and it was a prudent decision.
There was also a third group of people: Those of you who didn’t return our calls or come in for meetings to discuss the market opportunities, who watch too much political TV and were hoarding cash for the end of the world. Or, those who simply said you’d get back to us when we made certain recommendations, and that call never came. Shame on you. If your financial planning team takes the time to reach out to you, make it priority to call them back. That’s part of what you’re paying for.
The only thing all three of these groups have in common is that you’re all still scared to death of the upcoming election. However, that can’t be how we make our decisions – from a standpoint of being scared.
At Family Financial Partners, our investment philosophy is the same philosophy my mother taught me as a child: Always look forward, not back. Always embrace change, whether good or bad. And trust that even in the worst situations going on in the world today, something good will eventually come from it. Keep in mind this is not a political philosophy, but a life outlook philosophy.
As you go into the second half of the year, I challenge you to remind yourself that the world around you is constantly changing, and to remember that that also means there are some great opportunities you can take advantage of within your investment portfolio, as well as with funds you may have hoarded on the side lines. We look forward to discussing these opportunities with you during our next one-on-one chat.
Please know that even when we appear to be having too much fun socially, we are always focusing on moving you and your investment portfolio toward your planning goals, whether that’s retirement, helping your grandkids with college or buying a vacation home for family gatherings. We are always planning for you and yours.
And lastly, for those of you reading this who don’t work with us yet, give Alex or Brandon or me a call. Schedule some time to sit down and pick our brains. Whether that’s a five-minute chat over coffee, a phone call to ask about our investment philosophy or a full initial planning meeting, we’re open to what’s comfortable for you. We’d love the opportunity while there’s change in the air to show you how the other clients live.
