I began working in the financial planning industry in 2013. Since then, we have seen the Dow & S&P almost double in value with historically low volatility. From an investment standpoint, any retail investor would have had a hard time not increasing their account value over this time span; however, the investment environment has not always been this kind to investors. Most of my readers can think back to the near past of 2001-2002 and 2008-2009 to remember that markets do not inevitably increase. We believe that a well-grounded advisor actually provides the most value to their clients during these times of dropping account values and high volatility. Specifically, Legacy Planning Group looks to provide value in three specific ways:

1) Investing our clients in well-diversified, academically sound portfolios before any market drop occurs. We use academic research, combined with a client’s risk tolerance and need for a return to build their portfolio. Each portfolio is constructed to weather the “storm” of a market drop.
2) Employ strategies during the drop in the market. One of those strategies is “Tax-loss harvesting,” where we may decide to sell out of a fund that has decreased in value, reinvest the proceeds in a similar fund (while staying aware of the wash-sale rule), and then replace the original fund after the appropriate amount of time. By doing so, we have realized a “loss” that can go to offset taxable income or gain in the future.
3) Lastly, and most importantly, we coach our clients through the market drop. Just as a physical trainer pushes you beyond your comfort level in the gym - because he knows that the straining of muscles will bring long-term results - we as advisors know that it is almost always in the best interest of our clients to stay invested, especially when the market is uncomfortable. This is one of the reasons we meet with clients each year to review a market slide, which provides insight and begins to build the foundation of what to expect long-term.

I will close with a quote from the popular author Nick Murray from his book Simple Wealth, Inevitable Wealth, "No one will ever be able to resist the behavioral traps of investing without the calm, consistent, empathetic but tough-loving counsel of a high-quality advisor, whose skills aren't prediction and performance, but behavior modification. Thus, most valuable function of an advisor may be coaching clients past The Big Mistake. And this behavioral counseling alone is worth many times what the investor has to pay for it.” King Solomon simply states in Proverbs 12:15, “The way of fools seems right in their own eyes, but the wise listen to advice.”

If you sense the need for counsel, give us a call!

The SFA does not give tax or legal advice.

There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment.