​Three months ago, sitting down to write an article for the newsletter, UM was preparing to play for the National Title, and the Detroit Lions were getting ready to play in a playoff game.  Today, the first two rounds of March Madness have been completed, and my bracket in the Majestic Financial challenge is already busted.  The Otsego JV baseball team (I am an assistant coach) plays their first game of the season against Allegan, and I hope I have packed enough layers of clothing.

It may seem like my life revolves around sports, and to an extent that’s true.  But what fascinates me so much about sports is the same thing that fascinates me about investments – options specifically.  Sports are simple at their core – you play a game and one side wins, one side loses.  The opposing teams play by the same rules, share the same playing field, and deal with the same arbitrators of justice (referees or umpires).  Theoretically, there should not be any upsets since the games should come down to a simple matter of skill.  However, the strategies and momentum are what makes sports…well sports!  An Oakland University (without a single top recruit) can beat the storied University of Kentucky (starting 5 high school All Americans) by showing a defense that they didn’t play all year and feeding a hot 3-point shooter.  The Detroit Lions can make it to the NFC Championship game by running variations of blitzes that were never shown during the regular season.  What also intrigues me is that the upsets very seldom turn into championship stories.  Oakland lost (in overtime) their next game, the Lions lost to the 49rs.

Investing is the same situation, just more serious in nature.  The theory is simple – buy low, sell high.  Buy quality companies, maintain the proper asset allocation, increase your contributions when you can.  Easy, right?  But the strategies are endless and should be based on individual needs, risk tolerance, and goals.  Are we selling call options, buying put options, tax harvesting?  Are we selling or buying into a stock split or stock buyback?  Are we making a trade to potentially take advantage of coming interest rate cuts, and are we using options for this strategy?

At Majestic Financial, we are not investing for clients to make a quick buck, just like I wasn’t putting money on the Oakland University Grizzlies to make it to the Final Four.  We want to use strategies designed to help maximize returns that our clients want and need without increasing risk.  Our strategies may seem extreme while you are on the phone, in a zoom meeting, or talking with us in person and we are explaining them.  But that is only because we are not afraid to find a different way of investing than you may have done in the past.  As we head into the Presidential election, potential rate cuts, and continuing wars around the globe, remember that we are here to work with and for you.  We want you involved in the plan and decisions. 

Unlike my NCAA bracket, we want to help you succeed for the long term.  Give us a call and let’s talk strategies.

Written by Sean Budlong, CFP®, AAMS, Chief Executive Officer, Majestic Financial, Financial Consultant, RJFS
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Disclosures:
*Any opinions are those of Sean Budlong and not necessarily those of RJFS or Raymond James. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

We are all aware of how the world around us has changed over the last 3, 10, and 20 years.  Technology is King, and almost everything can be “Googled,” instead of learned.  Car broke down, Google “engine stopped running.”  Feeling sick?  Google “achy head and stuffy nose.”  Don’t want to pay for someone to construct the deck?  Google “easy deck construction.”  Simple, right?  Until you do more damage to your car, you find out you don’t have a cold but COVID instead, and your neighbor falls through the deck.  Just because you can read about a skill online doesn’t automatically grant you the ability to use said skill.

​The same is true of investing.  Many of the people I talk to about Majestic have the assets they need to achieve their goals, and the intelligence to invest them in simple mutual funds.  And if investing was as simple as going to a website and buying the one fund that will get you to your goal, everyone should fire us and google their way to financial freedom.  However, we all know it’s not that simple.

If you look at the 10 top companies (based on market capitalization) from 1980 to 2000 to 20023, there is not a single company from 1980 that appears in 2023.  In fact, many of the companies from 1980 disappeared (most through mergers) prior to 2000.  While a technology company has held the top spot in all three years, it’s changed each time.  In 1980, IBM was the largest company in the world with a $35 Billion cap.  In 2000, Microsoft took the top spot with a $586 Billion cap.  Just 23 years later, Apple crossed the $3 Trillion cap level.

Just as the companies that you would invest in changed, so did the companies you invest with.  In 2000, there were a handful of companies that offered “on-line” investing, led by Goldman Sachs, Prudential, PaineWebber, Ameritrade, Schwab and E*Trade.  Very few (relatively speaking) clients were interested in on-line anything – banking, shopping, or investing.  In 2024, there are far too many on-line platforms to name.  However, here are a few that may not be as well known but can be found on a google search: Betterment, Fundrise, Robinhood, Ally Invest, eToro, Firstrade, Yieldstreet, Tasty Trade, Stash.  Each of these sites offer different hooks to get you in, levels of services and fees, and “advice.”  All you have to decide is how much time and money you want to spend while working as your own financial analyst and broker.

And that’s the reason we talk to prospective clients first – we are not interested in charging clients fees just for them to do it all themselves.  We want to make investing easy and profitable even when we don’t control whether Exxon Mobil is the 5th largest company in the world (2000) or Saudi Aramco is the third largest (2023).  We don’t want a client who wants to google “why didn’t I make as much as the S&P 500 in 2023?”  We want to have that conversation about why they didn’t have every dollar in the portfolio invested in the Magnificent 7 (Google it…).  We know that the online companies will allow you to pay them less money for the right for you to do all the work.  We know that the online companies will allow you to pay them to use tools that may not be helpful in deciding if your money should be invested in ABC or XYZ company.  At Majestic Financial, we want to actually help you reach financial goals, not offer you a second job you pay for.  Not everyone needs a human advisor – or wants one.  But we aren’t interested in that person as a client, and we won’t compete with Robinhood.

So, Google all day long, and enjoy learning just enough to be dangerous.  We will keep investing in the ways that make the most sense for our clients.  And if anyone happens to talk to Laurie, please tell her I found easy instructions for remodeling bathrooms online.
 
Written by Sean Budlong, CFP®, AAMS, Chief Executive Officer, Majestic Financial, Financial Consultant, RJFS
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Disclosures:
*Any opinions are those of Sean Budlong and not necessarily those of RJFS or Raymond James. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. Investing involves risk and you may incur a profit or loss regardless of strategy selected.
*The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.
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