How We Watch Over Our Clients’ Money

If there is anything we learned in the last two years, it’s that nothing is certain. When the world is unstable, the market usually responds with volatility. While you can’t control the markets, you can control your response to market volatility. That’s where we come in. Here’s how we are watching over our clients’ finances and taking proactive steps to help manage their wealth.

Big-Picture Planning

We don’t make investment decisions based on what everyone else is doing or what’s popular in the investment industry. Whenever we make planning decisions with our clients and offer investment recommendations, we do it with their goals at the forefront. When the markets get shaky, we go the extra step of reviewing objectives to make sure they’re still on track and make educated decisions not based on panic or emotion.

This starts from the very beginning of our relationship with our clients. We use a range of return numbers when analyzing the potential outcomes of their plans because the future is impossible to predict with precision. We also use asset allocation “buckets” that divide their wealth into short, intermediate, and long-term strategies to help them make the most of a volatile market.

And in times like this, it’s even more important to have an emergency fund or a percentage of their portfolio either in cash or liquid enough if they need it for unexpected circumstances. While cash investments may not provide a lot of growth, having a cash contingency fund with at least one year’s worth of living expenses will protect against having to sell investments at low values to free up cash.

We Know Our Clients’ Risk Tolerance

Do you know that feeling in the pit of your stomach when you make a decision that was too risky for your comfort? Our goal is to help our clients avoid that feeling when it comes to their investments. Before investing any of their money, we determine their risk tolerance, the amount of risk that they are comfortable taking or the degree of uncertainty they can handle. Like most things in life, a person’s risk tolerance may change with age, income, and financial goals. We routinely review our clients’ risk tolerance and adjust their investments accordingly over time.

Time Matters

When you need access to your money is an important factor in how it should be managed. For example, if you are a decade or more away from retirement, a correction will likely not have a significant impact on your long-term plans. If you need access to your funds in the next five years or are within your first five years of retirement, a market downturn will make more of an impact on your money and your plans. From a practical perspective, we make sure our clients’ portfolio allocation is set up with their time horizon in mind. If a client needs money in the short term, their portfolio will hold safe investments like cash or short-term bonds. Because retirement can last decades, we recommend that some of our clients’ money be in investments that will produce long-term growth, but that type of portfolio will look very different from that of a 40-year-old in the peak of their working years.

We Provide Emotional Support

One of the most important rules in investing is to refrain from making emotional decisions. It’s easy to get swept away emotionally when the market negatively wreaks havoc on your finances. But if you stay true to your investment strategy and avoid making decisions when emotions are running high, you won’t run the risk of losing even more.

Remember, bear markets have happened before and they will happen again. As long as you have created a disciplined financial plan and have a trusted advisor who is monitoring your money, you are doing your part to prepare. If you don’t have someone you can turn to when the market gets wild, we’d love to support you and help you build your finances for a strong future. Call our office at 845-278-8638 or send us a message to set up a complimentary consultation.