“I am taking time to reflect on how the coronavirus and this financial crisis will affect investing as we move forward, analyzing recent recommendations and observations,” said Dr. David Kelly of JPMorgan Chase in a recent markets call.
The coronavirus, besides forever changing air travel, entertainment and working from home, requires us to re-think how we, as financial advisors, should construct investment portfolios going forward.
In the past when designing portfolios for retirees, widows and others who may no longer be in the work force, financial advisors needed to create a structured plan that focused on the investor’s long-term goals while accounting for market risk.
Now that the bear market is here, investors are re-sensitized to risk and are increasingly asking about it. Dr. David Kelly shared that portfolios should have “three sleeves: risk, guaranteed income, and non-correlated assets.” As such, this is a great time for investors to review their current investment strategies and understand “The Certainty of Uncertainty.” Essentially, nothing in life is “guaranteed,” and there are different degrees of risk in all of our undertakings.
While we cannot eliminate risk completely. We can do our best to try and reduce our exposure. We can “stress test” portfolios to simulate how they may perform under different market and economic conditions using our Risk Analysis and Portfolio Testing Review (RAPTR) tool.
I feel that when advisors reinforce the importance of rational decision-making, focusing on things that you can control and not on things you cannot, investors are often better positioned for managing life circumstances effectively. Instead of chasing returns, they are prepared for what we call the “certainty of uncertainty.”
It’s important to have a plan for all scenarios: for when times are good, when times are bad, when you are healthy, when you are not healthy, when you are alive and when you pass away. Investors should have a plan that allows them to access their money whenever they need it and in the most efficient way possible.
I believe quality financial advice starts with teaching clients to make rational decisions about investing so they have the money to reach their goals – whether planned or unplanned. Maybe it’s time to have YOUR portfolio “stress-tested”?
I recently joined APEX Securities & Asset Management, LLC as a new partner and Senior Financial Advisor.
I was recently the Branch Supervisor at Wells Fargo Advisors in Orinda, CA. I am a CERTIFIED FINANCIAL PLANNER™ professional (CFP®), Certified Investment Management Analyst (CIMA®) and Certified Investment Management Consultant (CIMC®).
For over 32 years, I have been committed to providing clients with the highest level of professionalism and personal service.
My family and I have lived in Brentwood since 2008. My wife, Alison, and I have two daughters. In my spare time, I enjoy a variety of activities including pickleball, golf, reading, traveling and being outdoors.
My focus is on helping pre-retirees, retirees as well as single women (divorcees and widows) plan for the next phase of their lives. My years of experience and knowledge are in the areas of retirement planning, retirement income planning, and helping clients with health care, social security, long-term care and estate planning strategies. I can be reached at 925-516-2732 or email@example.com.
– Eric Soiland, Senior Financial Advisor /Partner at APEX Securities & Asset Management, LLC
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. APEX Securities & Asset Management, LLC is a separate entity from WFAFN.
CAR # 0420-04270