Don't Lose Sight

We are now entering the busy season.  School is back in session, and even if you don’t have school age children (I don’t) roadways have a different feel a couple of times per day.  For many of us, our schedules are filled with football, baseball, cross country, soccer, and hockey/basketball starting soon.  We are also heading into the holiday season.  Finally, the weather is starting to change from the 80’s down to the 50’s – sometimes in the same day in Michigan.

At Majestic Financial, we also notice some changes in client comments.  Early in the year, we hear comments like “when will my tax documents be ready?”  Or “I need cash to pay for the Christmas presents I bought.”  One I particularly appreciate is “what do you think will happen in the markets this year?”  I could have hours of conversations about this topic.  During the summer, clients often start to evaluate the performance of their portfolio, hopefully with an understanding of what has been occurring in the market during the year.  We may have difficulty meeting with clients due to vacations and/or kids at home.  It’s in the fall that we start to hear comments like “I haven’t looked at my account for a while,” or “I’ve been too busy to look at what you sent me.”

Most people (including clients) would assume that if someone has money invested in the market, that person is watching the money like a hawk.  But in reality, most people don’t act this way (including many clients).  And often, it’s the November/December time frame that clients start to lose track of how their investments are performing.  I understand why this is – people are busy getting ready for a little time off, they may be traveling or having visitors, kids are getting ready for time off of school, it’s been a long year already, and they absolutely trust Majestic Financial (I especially appreciate this reason).

I’m writing this to ask our clients to not lose sight of three things: what was the purpose of the original investment(s), what is/has changed in their life, and how is their portfolio performing compared to the goals and the market conditions.  I want clients to pay attention to these items because they matter every day, every week, and every year.  That doesn’t mean I expect clients to track daily/weekly movements of their investments, but I would like them to know why an investment is soaring or why it’s flat – and how does that compare to what we would expect with that investment.  An example is over the past 3 years, interest rates have climbed and that substantially affects sectors of the market as well as fixed income investments.  If you only see the change to the values in these investments one time it may come as a large shock – you may be assuming that Majestic is failing in our fiduciary duties to you.  What you may not be aware of is the shifts of your money from long term bond funds to money market, or the sale of a bank stock and the purchase of a technology stock.  And as interest rates start to decline, these movements may reverse in your account.

Bottom line, enjoy football season, Christmas, tax season, the 3 weeks of summer in Michigan.  And please take the time to evaluate your portfolio along with your goals.
 
Written by Sean Budlong, CFP®, AAMS, Chief Executive Officer, Majestic Financial, Financial Consultant, RJFS

*Disclosures: Any opinions are those of Sean Budlong and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.