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Investing 101- Delivering Value

Jason and Alex started by talking about quantifying how we deliver true value to our clients as Fiduciary advisers. Jason explained how numerous clients have reached out to him because they were very nervous about the market around the election. They explained how some of these behavioral mistakes are not just 1,2,3 percent negative decisions. This could result in much more than 10, 20, 30+ percent negative decisions. Jason talked about not being able to time the market in a reliable manner, and even if you get it right the first time, there are no guarantees that you will get it right the second time. It is the job of a Fiduciary adviser to tell their clients no when they want to time the market, and stand up and protect their clients. Jason explained how his clients are afraid of a Biden win or a Trump win, and the market going down. He talked about the contrarian, strategic approach of buying more stocks when the market goes down because there will be areas of the market that will be cheap and attractive from a long-term return perspective.

Jason explains how people should desire to have an adviser that will be confident enough to tell them the things that they do not want to hear. This will ultimately protect them from blowing themselves up from an investment or financial planning standpoint. Jason compares this to a doctor telling someone to stop eating sugar because they are overweight and will die if they continue down this path. Some people would be offended by this approach, but most should appreciate the doctor looking out for their patient’s best interests because they truly care about their health. This is exactly how we treat our clients, while maintaining our integrity and caring attitudes.

Jason and Alex discuss how there is an average drop of 14% every year when talking about peak to trough. Volatility is natural and normal and is part of investing. Sometimes it lasts for a very short period, and other times it drags on for a few years. Investing is an emotional journey that is not meant to be fun. They discuss that this can be a miserable, and investors mainly want to know that they are protected, and it will all end up okay in the end. A time horizon is extremely important when implementing the appropriate investment strategy because investing is meant to be a process over time, not based on a moment in time or a single election.

One of the major pillars of investing is diversification, and they discuss how this is so important to help smooth out volatility and risk. Diversification is the best way to grow wealth over time. Jason explains that alternative investments can play an important role in a well-diversified portfolio for certain clients. Examples of these types of investments are private equity, private debt, real estate, etc. These investments are in areas of the market that are not publicly traded. There are risks associated with these types of investments, but there are a lot of positives in the private markets. They invite listeners to send their questions to jason@financialdetox.com or call 877-707-8889.

 

In this show you will learn about:

– Delivering value through intelligent asset allocation and behavioral coaching.

– The negative effects of timing the market.

– The hard truths that come from a Fiduciary adviser.

– Alternative investments and their potential role in a well-diversified portfolio.

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