How a Financial Advisor Adds Value

The financial markets have been turbulent again in recent days. But does this really affect you, today?


Asset Allocation
A financial advisor should determine what the appropriate amount of your money should be invested in stocks, while at the same time providing you with a solid cushion of cash, CDs and bonds. This way, you can sleep well at night, without worrying about the everyday movements of the stock market.

We all realize that it is easier to be an investor when stock markets are going up, but it is times like these, where major decisions (and major mistakes) can be made.

For example, we work with clients so that they have many years of cash and bonds available, so that if the stock portion of your investments goes down (temporarily), you will not be impacted (today) and need to sell the stocks right now.


Time Frame and Faith
A key component of the above planning, is that we understand what a client's time frame is. For someone with a long time frame, or does not need to withdraw money from their investments right now, a decline in the stock market should be viewed as temporary. As Warren Buffett often says, Mr. Market is always setting a new price, and it is usually either too high or too low.

We clearly recognize that there are many economic issues facing the US and the world currently. However, the same could be said about most time periods of the past, as well. The economies of the US and the world are resilient. The issues and challenges change, but there is always uncertainty.

We are realistic in our concerns, but longer term, realize that history teaches us that stocks do well in the long run, and particularly after down markets. The current volatility can be viewed as an opportunity.

If the economy looked terrific, and that was clear to everyone, then the markets would be at a high....and maybe you should be considering selling some stocks (we call this disciplined rebalancing).

At times like this, when there is uncertainty and fear, there can be a number of reactions. To freeze and not make any decisions is not in your best interest. If you feel you have not done good planning, or do not feel comfortable with your investments, then NOW is the time to act, to be decisive, or to get a "second opinion" of your investments.