The Market Has Been Unpredictable Lately

What is the favorite investment of the month?

The markets have been quite unpredictable lately, how do we protect our investments from becoming a subject of downward volatility(losses)? What mechanisms do we have in place to protect that portion of our assets that needs to be protected? A colleague of mine has developed a system that helps clients understand what should be done with their assets and how to categorize them according to their risk tolerance. I use his system to help my clients as well.

The ABC's of investing

The way I explain it to my clients is to use a simple method on a white board or yellow pad. This method makes it very obvious how my client feels about his/her money and is a natural way to view their own investment strategy. We talk about three categories of money and how the client feels about each one and look at how their money is currently allocated. Then we look at how we can reallocate their funds to make them feel comfortable and get the most out of the reallocation. There is a little more to the process  than I just described but basically it is simple and understandable.

Why Do I Use This Process?

First, If I handed the client a 50 or 60 page "Financial Plan"they would probably cringe at the thought of reading it all the way through. Secondly I use the ABC process to show them that they now have a firm grasp on allocations and know why they are investing in each category or allocation.

Confusion is the technique used by many stock brokers to enamor clients into thinking that the broker is smart and can predict the future of market movements. In reality no one can predict the markets because it has been proven by credible academics (Harry Markowitz, Eugenr Fama and others)who have over 100 years of historic data.

I am only scratching the surface of the ABC method here but if you would like to see how this will work for you, give me a call for a real demonstration.  Call me at 610-695-8748 or click here to contact me.