I Coach Investors

So, Evan, what is it you do for a living?

We are often asked this question by folks who don’t know us very well – at luncheons, in the lobby at church, even in some larger extended family events.

I have often answered that question in a way that is less than accurate because (I think) it would be easier for the person I’m talking to to understand. Some of my more common responses have been:

~ I’m a Registered Investment Advisor. True, and it sounds important, but what does that mean?
~ I manage money for folks. Yes, we do this too. Our group of coaches “manages” close to $3 billion.
~ I’m a Retirement Advisor. Where as this is true, it isn’t true for all of my clients. A growing number of clients have no plan to retire (myself included) and yet they are investors.
~ I’m a Financial Planner. Okay, just checking to see if you’re awake – I’ve never described myself in this way. Financial Planning is the problem.

Investor Coaching is the solution to what is wrong with the investment plans, portfolios and retirement plans of most Americans.

Coaching takes the emphasis OFF of – more to the point it removes completely – the following:

Timing the market – Markets are Random and cannot be predicted. Alan Greenspan, John Bogle, Mark Matson and hundreds of other life time money guys agree. No one can consistently predict what will happen in the market in the future. We should not try to do it. You get it right sometimes, but then again you sometimes win in Vegas too. Those who lose never tell you about it. We need to remove this destructive practice from our to do list.

Picking the right stocks – Those who buy and sell stocks ARE definately making money inside your mutual fund. Sometimes you see some of that money and sometimes you experience a loss as a result. The managers who do this ALWAYS see profit when they buy and sell.

Picking the right Mutual Fund Manager – Remember this FACT and it will save you a lot of heartache: Managers NEVER repeat. Never. The evidence on Mutual Fund Mangers has been available for decades now and is overwhelmingly in support of never letting an active money manager see a dime of your money. Not a single dime!

As your Coach – my job is the following (this is not an exhaustive list):

Allocate your funds in a way that is aligned with your tolerance for short term uncertainty yet allowing for growth in the longer term that far exceeds inflation and provides you with a meaningful increase in your future buying power.  We only participate in risk categories that are rewarded with an attendant return for having taken that risk.  Owning small companies and value companies in the right amounts is essential to maximizing your return and reducing your risk.

Remove unnecessary fees from being charged to your funds. You keep more of your money as we reduce your costs of investing. We do this by almost eliminating annual stock trading and by purchasing stocks BELOW current prices by buying in “blocks”.

Rebalancing your fund as often as is necessary to insure that your money remains in the same category of risk or future uncertainty. We call this number: “Standard Deviation” and we make sure that yours remains very consistent over time. This also picks up added return that in some periods will exceed the amount you pay for our service.

Lastly and most important, I coach YOU to remain consistent during times when you “feel” like you should be acting differenly than you have previously decided you would act. For example, in March of 2009, the market hit a relative low. Because of rebalancing we purchased stocks at that time in most of our portfolios because we had previously determined that is what we would do if the market changed the mix of assets in your fund. Consequently, my clients funds enjoyed the rebound in 2009 with more stock shares than they would have had they done what many “wanted” to do which is sell off some of the stocks and move to certainty. A move to certainty at that time was what many “felt like doing”. It would CERTAINLY have cost them thousands!

So, to set the record straight – I coach investors. I don’t manage, market time, trade or predict the future. The future will take care of itself if we take good care of what we know we should.

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