Each and every day all of us of drink from a fire house of information from financial journalism, most of which centers around selection and timing of investments. "Big correction coming," New hot stocks in AI to buy now," "Overseas conflicts to crash market," on and on and on.
They have to write something or say something because they have to fill a 24 hour news cycle. What you might not know is most of those media outlets are sponsored by financial product providers trying to sell you their product, whether that be gold, or some mutual fund, or new technology stock or even fear for that matter. They aren't in the predicting business, they are in the selling you something business.
This "information" infects the culture of investing and the average investor to focus on performance of their portfolio rather than the outcome they wish to achieve. But outperformance, in and of itself, is not a goal, nor is it something that can be consistently delivered or attained by me or any financial advisor.
Therefore, the value of a financial advisor is the achievement of your desired financial outcomes by systematically investing in asset classes where long-term returns are appropriate for your financial plan. Meaning our value is delivering outcomes, not outperformance.
Those two are not the same thing and the latter (outperformance) does not guarantee the former (outcomes) and they should never be confused by you the investor. An advisor shouldn't even suggest that his returns are ever going to consistently exceed and benchmark or average.
As an advisor, I mention often to clients and prospects the following:
I do not suggest that your investments are going to produce consistently greater returns than your neighbor's investments over any period of time. But I do maintain that working on a long-term plan and avoiding behavioral mistakes that you will achieve a significantly greater lifetime return than most of your neighbors.
As an advisor that focuses strictly on retirement planning, outcomes, not outperformance is what matters.
If we beat a benchmark on occasion and you run out of money at some point in retirement, did we win? I don't think so.
If we focus on our long-term plan and make wise decisions with your income and asset allocation and you don't run out of money and you are able to leave some assets to your heirs when you pass from this world did we win? I think so and that's exactly what I try to do with each and every client that has entrusted me with their retirement planning.
Would You Like a Second Opinion on Your Retirement Plan?
80/20 Financial Services is a fiduciary financial planning firm located in Ozark, Missouri, however we can work with you regardless of your location. We specialize in helping cooperative employees plan their retirement. We can show you how to turn your NRECA 401k and your R&S lump sum into a stream of income just like when you were working while also helping you achieve your desired financial outcomes in retirement.
Thanks for reading,
Brian Coleman-Owner/Advisor