I started in this business in 2009 after the stock market crash of 2008.
The small company I worked for, David Lerner Associates, focused on investments outside of the stock market. It was there that I met many of my current clients. As the stock market rebounded, I found investments for my clients outside of the company’s proprietary investments that were more aligned with the increasing stock market.
In 2015 I left David Lerner to go to Waddell & Reed. I wanted to become a fiduciary for my advisory clients, become more holistic in my approach and become a true financial advisor. It was time to stop being a broker and focus on more than just selling products. I started to do financial planning, started to offer insurance products and planning, and built portfolios for my clients. Times were good and learning portfolio management in an upwardly moving market formed the beliefs of many, including myself.
The year 2020 brought Covid and a market crash. The Federal Reserve and United States government flooded the market with stimulus and engaged in substantial financial easing - causing an opportunity to buy riskier stocks and make extraordinary returns. I took advantage of this opportunity for my clients.
Then in late 2021 into early 2022 we saw the start of inflation and the meltdown of the investments that had prospered so much just a short time before. It was quick, too quick, and many, me included, learned a great lesson about risk taking and balancing portfolios.
The year 2023 saw a good stock market return which many investors did not expect as recession fears persisted as well as many other concerns both domestically and internationally. This period provided another lesson in investing and again proved that having portfolio balance and not leaning too much one way or another was prudent. Timing the market is not the path to long term portfolio growth. Staying in the market over extended periods of time is more important for investment returns.
Here we are in 2024 and the market year to date, has had above average returns. I find my clients’ portfolios more balanced than ever while also experiencing nice gains. I have applied the lessons I have learned through the past periods of ups and downs. Now, instead of trying to beat the market, I have positioned my clients to participate in gains while having a significant number of investments that will lose less or make money during market downturns. For years, Wealthier individuals invest in Hedge Funds because they focus on limiting their client’s volatility and losses in down years. Taking a page from these investment managers, I am also building portfolios that have less volatility as that should lead to better long-term gains.
I have evolved quite a bit as a financial advisor and continue to learn and grow every day. Having started out trying to beat the market every year, I now want to make sure that my clients get good returns without taking unnecessary risks. Initially, I only invested in growth-oriented investments with more risk and thought that would always work. I now understand that balance is better over the long run. Now I create portfolios that are diversified and more balanced, containing investments that offer some strength in times of volatility.
Portfolios that are less volatile provide better longer-term returns. Steadier returns offer better compounding than more volatile results and that is what most clients want. As the year 2020 showed, there will be times to take excessive risk. I have proven in the past, that I am not afraid to do it and have the knowledge and aptitude to execute.
For the first time in many years, I believe that short-term bonds have a place in my clients’ portfolios. With the Federal Reserve projected to lower rates over the next 15 months or so by 200bps, there is an opportunity to get high yields (income) and price appreciation unlike a CD or money market account. Bonds move inversely to yields so when yields come down prices go up and the opposite is true when yields go up - as has been the case over the last several years.
Markets have changed many times since I began my career. I feel fortunate to have learned from each change and improved with them.
If you have any questions about the information above or would like to visit about your situation and investments, I invite you to contact me.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
Investing includes risks, including fluctuating prices and loss of principal. No strategy assures success or protects against loss. All performance referenced is historical and is no guarantee of future results.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.