There are two things that need to be managed in a client's life to help them to become a successful investor:
♦ Investments/Strategies (account for approximately 10% of the portfolio's return*) ◊ Investment Selection ♦ Behavior ◊ Asset Allocation Strategy (accounts for close to 90% of the portfolio's return*) ◊ Comfort Level (Risk Tolerance)
*Source: 1995 Brinson/Hood/Beebower Study
A Managed Account is one way to have your money managed by an investment advisor while helping to reduce common investor mistakes.
◊ Managed Accounts were only available to large investors and are now available to investors with $50,000 or more ◊ Investment funds and securities are selected based on the client's objectives, time horizon, and risk tolerance
Why do clients need a financial advisor?
♦ Investors that don't have a financial advisor working with them may be buying high and selling low ♦ Between 1985 and 2004 the stock market (the S&P Index) averaged 13.2%* ♦ What did the average investor make? ◊ 3.2%* ♦ The idea of working with an advisor is to get the client to focus on things they can control and not worry about the things they cannot change ◊ Things they can control (items they should react to) ♦ Investment Objectives, Time Horizon, Risk Tolerance ◊ Things they cannot control (items they should not react to) ♦ What the market does in terms of performance and volatility ♦ Interest Rates ♦ Super Bowl winners and hem lines (ask us sometime)
*Source: "Quantitative Analysis of Investment Behavior 2005," Dalbar, Inc. 2005
Working with a financial advisor can help keep clients invested, which does two things:
♦ Makes them follow a sound investment strategy ♦ Creates a long-term relationship with the advisor, which benefits everybody
Reed & Associates, Inc. 16935 W Bernardo Dr Ste 112 San Diego, CA 92127-1634 Phone: 858-673-0878 | Fax: 858-430-3883 | Email: info@reedwealth.com CA Insurance License #0534132
Advisory services offered through Reed & Associates, Inc., a
registered investment advisor. Pension plan record keeping offered
through other fine companies.
