Last year, my wife and I went on a two week vacation to celebrate a milestone birthday. 

One of our stops was a small Italian town on the Amalfi Coast.  During the day, my wife enjoyed exploring around town, sometimes by herself, sometimes with friends.  She would come back with stories of little shops that she found as she wandered about.  Every evening, we walked to a restaurant and, following a wonderful meal, held hands while taking an evening stroll. 

One night, as we sauntered down a moonlit street, without a streetlight in sight, she dropped my hand and drew my arm around her.  She asked me, “do you feel safe?”  I thought it a very strange question.  After all, we were in a town with very little crime where most of the population relied heavily on tourism.  I am, by nature, cautious and even possibly overly vigilant— I thought that there was no way we could be in any danger.  I asked what her worries were.  She said, “I don’t know, walking at night just feels different, scarier.” 

She was walking the same streets that she walked during the day. But now, at night, she needed the assurance that someone else was watching out for her.

Today’s market environment is much like that stroll along a dark street.  For the past decade, many investors believed they would be able to choose virtually any stock or US market index and experience a double digit return.  For many people, that has been a reality. 

However, the world has changed. 

Today, we see market volatility, sudden and dramatic unemployment, and questions of when, if ever, we will return to normal.  While you may have felt confident in your own investment decisions over the past decade, today you may not be as sure. 

Studies have shown that working with a financial advisor results in better overall financial performance. Vanguard, one of the world’s largest investment companies, has been examining this for 15 years. Based on research, analysis, and testing, Vanguard concluded that, yes, there is a quantifiable increase in return from working with a financial advisor. Vanguard calls this advantage the Advisor’s Alpha. When certain best practices are followed, the result can be an Alpha in the 3 percent per year range.

A separate study by Russell Investments, a large money management firm, came to a similar conclusion. Russell estimates a good financial advisor can increase investor returns by 3.75 percent.

This is to say that your financial advisor can help you maintain a proper course even when the rest of the world has gone dark.  Conversely, your “trusted news source” is designed to give you the most sensational headlines— and at times like these, those headlines can scare you into making questionable decisions.  As a fiduciary, your financial advisor is legally obligated to give you the advice that is in YOUR BEST INTEREST.  We will always be available to help you maintain, correct, or even set a new course.  You can be confident that any decision that you make has been made after weighing all possible outcomes and scenarios.

If the world seems a little bit scarier today than it did last year, we understand.  While we may not put our arm around you, we are certainly here to help navigate these uncertain times.

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Further Reading:

Morningstar: The value of working with a financial advisor—study