Are you like me? Do you let other people manage your investments for you? While employed, it is often the folks who manage the retirement or company savings plan. When changing employers, often the old plan is left alone and gets managed by whatever firm your previous employer hired to run that plan. Some folks do roll it over into a new plan with a new employer, but many don’t. They let it ride. Then it comes to retirement day. No more 401K, 403B, or 457(b) contributions. Do you let it still ride with the old asset managers or do you roll over and combine your various investment accounts with a single manager? Of course, some folks already have Individual Retirement Plans; either traditional or Roth set-up but what if you don’t? For me, I went in search of a financial planner to help me ensure my investments and savings would last me in retirement.
So how do you decide who to go with? Do you Google™ financial planning companies and see if you have one near-by that you might like? Perhaps you contact your local bank or credit union. Many of them have financial planning services for their customers. Or perhaps you know someone who knows somebody that’s in the business of financial planning and they are recommended to you. It’s really a trust issue and there is no one right way to find the planner that’s right for you. Just take it step-by-step and do your due diligence.
My search started with the daughter of a shipmate from my time in the military. Some of my other co-workers had used her services after they retired, and all were happy with her service. So, I figured that was a good starting place for me too. I made an appointment with her. At our initial meeting, Laura Pedroncelli who works out of an office in a local credit union in Santa Rosa, helped me define my retirement goals; understand how to rollover my other accounts without tax consequences; and address my risk thresholds and investment concerns. She went to work creating plan options to meet different scenarios that might occur later in my life. It was now up to me to decide what, if any, of her investment services I would choose.
So now what? Once set-up, is it on autopilot like it was when my employer was managing the assets? Not really. Although Laura is working for my best interest, it’s still my money. The risks of gains or losses are my risk. When the monthly statements arrive, I can’t just file them away. They need to be reviewed. Part of her service is answering my questions and addressing my concerns. Whenever my review or other legal disclosures about various trades raises a concern, she is just a phone call or e-mail away. And over the years we’ve had follow-up meetings to re-review my goals and any changes impacting on my retirement plans. Like my shipmates before, I’m a satisfied customer and trust my financial planner – which is what we all should desire!
So that’s where the rest of this story comes in. I’m sure you, like me, often receive invites to various seminars, presentations, or events related to one aspect or other of your money or investments. Social Security/Medicare planning ring a bell? How about tax planning? Or investing in real estate, perhaps how to flip a house? When I got them, I’d often wonder if they were worth attending or was it some type of come on to sell me on something; whether I needed it or not. Usually, the invite was ignored or tossed. I didn’t think twice about attending. But then Laura hosted an event recently and sent her clients an invite to attend. The event was held at the Flamingo Hotel in Santa Rosa. The main speaker was Mr. Ted Rudolph, part of the Asset Management Division of a large financial services company. The Presentation was labeled “Market and Economic Perspectives… Easy Does it.”
I was curious. I had the time. While I consider myself financially responsible and somewhat aware and knowledgeable about market conditions, I know I don’t know enough to consider myself savvy or an expert. Yes, I know the difference between a Bull or a Bear Market; what qualifies as a recession and various terms such as: Liquidity, Diversification, Bonds, Stocks, or Commodities. But listening to the talking heads on the financial shows on television still confuses me. Therefore, this time, I decided to attend. If nothing else I’d get to see some friends, enjoy some finger foods and a glass of wine. If it was boring – an early exit wasn’t a problem. But it wasn’t. It was interesting. The first 30 minutes was getting some food and a drink, socializing a bit before settling down. Then Mr. Rudolph using a 40-page handout gave his 45-minute presentation which was followed by a 30-minute Q&A period.
His packet was jammed full of slides, data points, and talking points. His verbal presentation highlighted key points in the packet with emphasis on the current state of the markets followed by a look ahead to next year and estimations for a couple of years to follow after that. He kept the focus on what we as investors should worry about and what we shouldn’t worry about. Some of the interesting data points were 97 percent of countries are, experiencing a growing economy – even if they’re growing slowly and projections are, they’ll continue to grow on average at a 2 percent rate over the next few years. He also covered the risk factors that is what could move the market in a negative direction. He stated that the usual signals for a Bear Market or a Recession weren’t currently being seen. These included no obvious bubbles building; an economy still growing, unemployment rate remaining low, low interest rates; access to credit easy; and decreasing consumer and business debt.
However, one volatility factor that may drive the current market lower was identified as politics. The markets like certainty and the political environment heading into 2020 is anything but certain. So, the advice given was stay the course, diversify and invest in the intermediate term (versus short term/long term). A silver lining about the political environment was that it is unlikely either political party will have control of the House, Senate and the White House after the elections. That probably means that gridlock in Washington is likely to continue. As Mr. Rudolph said “if the certainty is that nothing is going to get done in Washington” then that is actually good for the markets.
I enjoyed the event. I learned some new concepts and facts. I got a better understanding how the markets impact me and my investments. I feel comfortable recommending that if you get the chance to attend an event similar to this one – take it. Go slow. Use your head. Take what you hear with a grain of salt. But the more you know, the better your decisions will be. Just remember: “Past Performance does not guarantee future results”.