I have always been competitive, which led to life-long love of sports. I enjoy watching athletes develop into amazing teams. Of course, coaches and front office staff have to manage expectations of players and fans, but every athlete has the internal desire to be the best and to win. That fire inside helps athletes achieve success.
When I began my journey to be a financial planner, I had the desire to be the best and was playing to win. I believed that in order to be a good financial planner, I had to beat the market and be on television. Then the clients would be knocking down my office door wanting me to manage their money. Boy was I wrong!
Stock picking is fun and I do believe I can be successful doing it, but it’s hard to do with someone else’s life savings. When you’re engaged in stock picking, or day trading, and only focusing on performance, you have to be fearless. Sometimes you have to swing for the fences even though you may strike out. Financial planning is a very competitive industry, so it may seem wrong to say this, but if we are truly working for our clients, we have to adopt a “don’t lose” mentality.
Of course, all we see in the media is the “Wall Street Hot Shots” and the luxuries enjoyed by the “super-rich.” However, we rarely see the full story of how these people acquired such wealth. For example, Warren Buffett had to have experienced some losses in his almost 70 years of investing. The Wall Street guys have lost as well. They have more money to fall back on when they make mistakes, but the middle class client cannot afford such risks.
As a financial planner, I have to understand the value of the money to the client. These funds may have taken a lifetime to accumulate. We can’t take unnecessary risks just to have a high performance number. We have to be like the coaches and front office staff of a sports team by managing expectations and working to put our clients in what we believe is the best position to be successful. Yes, we want your portfolio to perform well, but we also must remember how devastating it would be for you to lose everything.
This is why I believe the FormulaFolios way is the right philosophy. Instead of chasing the market and trying to outgain benchmarks in the short run, we try to avoid the big declines in the market. In theory, this philosophy may allow us to outperform benchmarks in the long term. I truly believe in this philosophy. Winning is not nearly as important as doing what we can to help protect the client. Investments always have risk, but our philosophy takes some of the arrogance and emotion out of the equation.
If you would like to be a part of this movement to change the financial services industry, contact me and let’s start planning your future!