Another New Year and What a Year It Has to Be!

Jan 1, 2018

Well, here we are. We survived the holidays and are fired up and ready to enter into the unknown of 2018. I’m sure some of you will read this and nod your heads favorably when I bring up a stock market over 25,000, but I distinctly remember speaking with many advisors only to hear them say it’s damn near impossible to expect that we would see anything like that in 2017 or 2018…or even unlikely in 2019, or ever!  The bull market is not the only barometer of a growing economy. We’re also seeing healthy employment numbers and what could prove to be a good year overall for GDP. Not a bad way to start, right? Then why do I feel this sense of concern? I’m an eternal optimist, smiling most often and looking forward to tomorrow more often than not. What’s wrong?

I think everyone agrees this has been and continues to be one hell of a financial ride. Virtually no resets, no corrections that we can really call corrections and an upward trend line that has been culminating in record after record after record for nearly every measurable gauge we have to assess. So, pardon me if I throw a little water on the fire, a little cautionary suggestion to keep in mind that while things are very different today than they’ve ever been, history has a way of repeating itself. It may look a little different this time around but I assure you, it will happen. A bar graph of the years of growth or a trend line on a graph clearly demonstrate something different is happening here and it’s been going on longer than any growth period in recent history.  Arguably, it’s a multi-year run that still has legs as a result of the new tax laws recently passed. Doesn’t it?

So what do you do? How do you prepare for the inevitability that something is going to give and you don’t even know when? Do you keep recommending to “buy and hold”? Do you suggest a solid move to cash now to minimize the pain of a downturn? What if it takes another year? Do you gradually pull investments into more secure positions to try to buffer a downturn? Maybe you go rogue and dump money into alts or cryptocurrencies. I don’t have the answers but I do know a happy new year is going to be one with continued security and confidence. And the expectation put on advisors is going to be to continue the growth of previous years and keep your clients comfortable. No small feat.

It’s not going to be good enough to tout positive returns (everybody had better have had positive returns over the past few years) or the simple yet necessary portfolio review to see where things stand. It’s human nature to leave things alone and not adjust in a rising market.  Why minimize the return potential? How about for the security of the retirement portfolio? I’m not an advisor. I’m a client. I know nobody has all the answers and as I get closer to retirement age, Social Security age, Medicare age, I want less worry and continued optimism. The great advisors do their best to make those recommendations and help diminish the anxiety of the biggest worriers. They’re setting themselves apart from the charge-ahead folk by presenting options. They’re discussing alternative plans to keep the growing pressures of inflation and market changes out of the minds of their retired clients, or soon to be retired clients. I sure hope they are at least.

Using a tool like Advisors Prep is what gives that type of advisor an edge. It’s that point of differentiation that takes you in a different direction than what everyone else is doing. It’s a way to take people’s minds off the daily conversation and have them consider other topics that position you as a sustaining resource. After all, isn’t that really what we’re all looking for? I would like to see this year be a happy new year as a result of the buffers and security implemented by Advisors Prep advisors. And while I know the human condition of greed is as inevitable as a change in the market, at least we can say we’re trying to do the right thing. Market timing isn’t a realistic consideration but simple tactics to make us, average Americans facing retirement, just a little less anxious and a lot more optimistic would really make a difference. It’s bad enough that memories fade as one ages, let’s not let the obvious historical cycles be forgotten. When something really does take place, this year or next or the following, we can look at how we handled it and say we did it differently. Likely better. And saved a retirement nest egg from disaster. That’s a happy new year for me. And cause for celebration next year!

Here’s to a happy, healthy and prosperous 2018.