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“Well, war in Ukraine is still going on, supply chains are still broken and inflation is sky rocketing” says a client recently to me. He leans back in the chair, puts his pen in his mouth, pauses for a few moments and then continues “I know the issues, I don’t know if I know the solutions.”
You see, we were discussing how to best adjust his portfolio or if to do so at all, based on where he’s at in life now. More specifically, how what has been going on “in the news” impacts him.
In fact, often times this is an on going conversation with him and most clients I work with. While I will leave the rest of the conversation to the specifics of each interaction, here are a few things that typically come up through that conversation:
1. What is the purpose of the funds/investments?
This is one of my all time favorite questions. I get varied answers, from “to make money” to “be able to retire” and everything in between. I usually don’t settle for the first response either, as it is usually surface level. So, try to dig deeper when thinking it through. For instance, be able to retire might turn into “I’ve spent 30 years sacrificing, delaying vacations and working hard. Now I want to enjoy the time I have with my wife, see the world, make an impact and visit the grandkids.” If this is the case, then one might be positioned as such in their assets.
2. Has the answer to number 1 changed?
One crazy thing about life is it is constantly changing. I have sat with clients and shared the joy with them learning about their new grandchild. I have wept with them at the news of a terminal illness or family member passing away. If something has changed in life, it is a perfect time to re-evaluate the purpose of your funds and as such, a different strategy.
3. Is this time really different?
“The investor who says, this time is different, when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.” – Sir John Templeton (a prolific investor and fund manager)
The urge to think this time is different is a battle we all face. I find it amazing though, when one turns the pages of history, there is a common theme of strife, challenge and heart ache that faces every generation, and yet, the markets still march on (albeit a bumpy path).
Obviously, no one has a crystal ball and I most certainly cannot tell the future. Therefore, rather than trying to do so, I always try to steer the conversation back to those 3 points and much more to keep the focus on what we can control and the outcomes we’re targeting.
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All written content on this site is for information purposes only and is not intended to provide specific advice or recommendations for any individual. Opinions expressed herein are solely those of NWM, unless otherwise specifically cited. Kyle Newell and NWM are neither an attorney nor an accountant, and no portion of this website content should be interpreted as legal, accounting or tax advice. Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investment involves risks including possible loss of principal and unless otherwise stated, are not guaranteed. Any economic forecasts set forth may not develop as predicted and are subject to change. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.