As 2017 comes to an end, I have been thinking about what I have learned in my over 30 years as a financial planner. I have been fortunate enough to have been through some severe downturns in the markets and have managed to learn a few things. As I, and my clients get older, I focus on the tried-and-true and not on the flavor of the day. This has to do not only with the investment vehicles we pick, but also the managers we use. In terms of investments, we concentrate mainly on stocks, bonds, real estate, private equity and life insurance. We pick managers in these areas that have proven track records over long periods of time, and in our opinion, offer excellent value. It does not mean they will be at the top of their peer group every single year, but over extended periods they rise to the top. We do not believe in market timing. We do believe in strategic asset allocation and diversifying. We are investors, not speculators. While returns are important, we are more concerned about protecting our clients’ hard-earned wealth. Therefore, we focus on controlling major losses as well as income taxes. We show our clients how to minimize taxes by the type of investments we pick, the location in the appropriate accounts, the order to take distributions during retirement and minimizing required minimum distributions. We believe in rebalancing and active investment management. My clients don’t pay me to build a plan, they are paying me to change the plan over time. Our job is to be an advocate for our clients and to help them manage emotions and adapt as the world and their lives change. None of this is glamorous or exciting, nor the talk at cocktails parties, but it gets the job done. We do not look to our portfolios for excitement, clients have their lifestyle for that. Hope you enjoyed my ramblings. Happy Holidays.
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