I once had the opportunity of attending a financial conference where legendary value investor, Jean-Marie Eveillard, was in attendance. During a dinner, I had the chance to visit with Jean-Marie and shared with him that we invested some of our clients’ money in his funds.
No sooner had I begun to explain that many of these clients were widows, retirees, and children with trusts for their college funding, when he stopped me. “Please,” he said, “I don’t want to know the faces of those that are investing with our fund. I only want to focus on simply buying stocks at a good price.”
I will always remember his response because, as financial planners, we want to “know the faces.” It is imperative that we understand the goals, objectives, and concerns of our clients. Some are aggressive investors, some need income, while others simply are looking to invest without a great deal of surprises along the way. Each client is unique and must be viewed that way.
Our job as your wealth advisor is to understand your financial goals on a case-by-case basis, and manage risk with portfolio diversification that focuses on the long-term.
Over the last few days we saw stock markets turn down sharply. Many investors are rightly concerned and wonder if this will continue. But let’s take a moment to place this volatility in perspective. According to Bloomberg.com, this was the 20th time since the bear market ended in 2009 that the Standard & Poor’s 500 Index had a one-day loss of 3 percent.
By our way of thinking, being an “investor” is synonymous with having a long-time horizon. In the financial markets, almost anything can happen in the short-run because market prices are driven more by emotions, unpredictable events, and human “herd” behavior.
To explain the reason behind the last two days of market volatility cannot explain what is most likely a random event. Many may say they saw it coming, but most likely they share this view with the benefit of looking in their review mirror.
Robert W. Tull, Jr. is founder and president of Tull Financial Group, and a CERTIFIED FINANCIAL PLANNER™ professional in Chesapeake, Virginia. With more than 30 years of financial planning experience in Hampton Roads and beyond, he focuses on the areas of investment management, and retirement and estate planning. He also provides highly individualized personal and business advisory services.
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