Lullaby Part 3: You May Be Right

Here we present the third and last installment of our three-part blog entitled “Lullably: The Financial Markets Tease Us Back to Complacency”. This piece takes a retrospective on the market over the past three years, while offering a progressive commentary. Make sure to read Part 1: We’re Only Human and Part 2: Pressure. Click on the Lullaby-blog to down the entire 3-part post in its entirety as a pdf.

Most investors (especially business owners and executives) allow themselves to take advice based solely on returns, or at least the hope of those returns.  But if one were to momentarily step back and evaluate what they are trying to accomplish, one could expect to see a misalignment in values.  The mistake most advisors make is to never ask their clients what is important to them as a person.

When (if ever) has your advisor asked you what money means to you, and what it is that you hope to accomplish with it?  Do you want to care for your family and transfer great wealth to the next generation?  Do you want to use it to show your success?   To become a mogul?  Is it prestige?  Power?   Your answer will never be wrong, but the question does need to be asked.  Looking at your future does not end with an asset allocation; that’s merely the beginning.

If your advisor does not understand who you are, they cannot aid you in a direction that works for you. Financial success is a full time job.  It requires a consultative team of experts constantly looking out for your specific goals.  It requires staying awake at the wheel.  It is not okay to ignore the issues in front of you; those will not go away.  Complacency won’t kill you; however it won’t allow you to reach your personal financial goals either.

Business owners and executives need to understand that identifying what money means to them is just as important as identifying why they are in business in the first place.  It cannot be stated strongly enough that a person must understand that they are successful because of what is known to them, and that it is necessary to delegate to others what is not. Successful Wealth Managers are just that, because they recognize the importance of setting their ego aside. We cannot know everything, which is why the only approach that should be acceptable to you is one where your advisor has a collaborative team of experts who are the best in their fields. Your team needs to include not only an investment consultant, but also highly regarded professionals in tax, estate, and insurance matters.  Your Wealth Manager’s job is to bring these minds together and work as a team to help you accomplish everything that is important to you.

Today’s world will not allow you to close your eyes.  Questions cannot be saved for another day.  Our economy remains unstable and there are many, many hazards that still lie in front of us.  Investors of all types need to have a game plan that is based on the values and goals held most dear to them.  As we most likely face new lay-offs and challenges, we need to have a steady hand guiding our wealth and adjusting it accordingly.  Portfolios should be built in such a way that market fluctuations do not necessitate hurried responses.  Tax and estate issues must be constantly monitored, as the current environment can render the best of plans irrelevant. Insurance needs to be solidly in place and performing as designed.

Economies expand and contract.  It’s a simple fact of how they work.  While this fire has already been burning long before we understood the significance of its impact, we can contain it and even work with it to turn our challenges into victories.