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Worry-Free Portfolio Management™

“I wish I hadn’t spent so much of my life worrying.”
The Cornell Legacy project was an extensive project asking “what are the most important lessons you have learned over the course of your life?” The #1 greatest regret stated by elders was: “I wish I hadn’t spent so much of my life worrying.”

Based on this understanding, we have created a process we call Worry-Free Portfolio Management™ intending to help investors reduce this regret. It is not a guarantee of zero risk. Instead it is an educated and collaborate approach to making the transition to key life stages by addressing each worry as it arises. Some make the analogy of getting monkeys off your back. It is about making the right choices based on transparent and fundamentally-derived odds instead of succumbing to the false promise of risk avoidance. Because the financial services industry represents multiple profitable conflicts of interest, this process requires extensive education, ongoing oversight, and should ideally involve the entire family.

Many of our clients follow the wisdom of thought leaders like Dave Ramsey and Tony Robbins, who both suggest taking personal responsibility for your actions. We have identified 4 key life stages of planning that represent the journey to a worry-free state. These are:

  1. Accumulator to Financial Independence
  2. Financial Independence to “Retired”
  3. “Retired” to Benefactor
  4. Benefactor to Sunset

For each of these stages we monitor different metrics. Key metrics for Financial Independence include getting rid of debt (including mortgages) and having sufficient wealth to consider retiring or at least working part-time and doing something else with your life. In order to be “Retired” you need to have high confidence in the odds of generating the income you need for the remainder of your life after work by converting assets into income. Some years after our clients are “Retired” they find that they will now leave an estate to heirs or charity. At this point in your life, as a Benefactor, it is important to make the necessary changes to your estate plan and work with your family to understand how your goals will be accomplished.

Worry-Free Portfolio Management™ is a pragmatic process. Few of our clients are truly free of worry but know that they don’t have to worry about the process. The key elements of this process are:

  1. Run Away from conflicts of interest. You shouldn’t worry about how your advisor is paid. He should only be paid by you.
  2. Profit from fundamentals the crowds ignore. You shouldn’t worry about when to time the market or what securities to own. This should be based on sound fundamental principles proven to work over the long run.
  3. Don’t limit yourself to what others “know.” You shouldn’t worry that all markets are equally risky. At times smaller companies and international companies are cheaper than larger US companies representing better “risk” as measured against the likelihood of permanently losing capital.
  4. Don’t be the sucker at the table. You shouldn’t worry about being led by the financial media to buy securities when they are expensive and sell them when they are cheap. This pitfall has caused investors returns (as measured by their cash flow) to lag the investment returns (if held fully invested instead of market timed) by over half.
  5. Not what you want to have but what you want to be. You shouldn’t worry about how you measure progress against your goal. It is not against an arbitrary benchmark like the US stock market but instead a sense of freedom achieved by meeting key benchmarks and knowing that you can achieve your goals with high confidence.

For existing clients and interested prospective clients, we invite you to reach out to us and see where you stand on the worry-free checklist. Some of the questions we ask are:

  1. Do you understand the potential conflicts of interest that may exist in your current advisory relationship:
    a. Does your financial and investment advisor have an insurance license?
    b. Does your advisor work for a publicly traded company whose fiduciary responsibility lies with shareholders instead of clients?
    c. Does your advisor hold securities license and may be paid commissions?
    d. Does the advisory firm for whom your advisor works have revenue sharing agreements with investment companies?
    e. Does your advisor’s firm offer proprietary funds?
    f. Is your advisor a friend or family member?
  2. Do you have an accurate assessment of your risk proven to be valid over time?
  3. Does your advisor offer comprehensive planning and work closely with your estate planning and tax professionals to ensure full plan implementation?
  4. Do you understand the current market environment risk/ return opportunity set?
  5. Does your asset allocation represent an understanding of this, modified for your risk tolerance and risk capacity?
  6. Does your advisor understand your goals and have a strategy to help you meet them including:
    a. Getting the debt monkey off your back and getting rid of your mortgage
    b. Identifying the right strategy to move from working to financial independence to retirement through a detailed scenario analysis of differing approach to work and taking social security
    c. Smoothing income for tax purposes where possible
    d. Designing an estate planning strategy before going to see an attorney and then implementing the plan

While every client is different, we have found a detailed approach to analyzing these questions helps our clients sleep better at night. Please contact us to set up a call to discuss.

For a Complete Explanation on How Our Worry Free Portfolio Management can help you,

Contact Us Or Call Us at 864.272.0818