In my career as an advisor, I never have seen so much hype and debate over a Fed meeting.
As I’ve weighed all of the data and risk factors, I hope they do raise rates so we don’t have to continue the debate over pros and cons. Regardless of when the Fed decides to act, the more important question is how are we, as advisors, helping our clients filter out all the noise and concentrate on long-term wealth accumulation?
What I have been communicating to my clients is to turn off the “investment pornography” and practice D.A.R.E:
Diversify: Globally.
Allocation: Check the ratio of stocks to bonds and be sure it’s commensurate with your clients’ ability to take risk and stay in the markets throughout all the volatility.
Rebalance: Adjust portfolio whenever the fall outside the allocation tolerance range.
Evaluate: Review the stage of life your client is in and adjust portfolios and expectations if necessary.
As always, practice patience! The greatest contribution you can make to your clients’ long-term wealth is exercising patience. And that’s where you come in. Remind them of these stats:
MSCI World Index (net dividends) 1970-2014 | |||
Best Years | Worst Years | ||
1986 | 41.9% | 2008 | −40.7% |
1985 | 40.6% | 1974 | −25.5% |
2003 | 33.1% | 2002 | −19.9% |
1975 | 32.8% | 1990 | −17.0% |
2009 | 30.0% | 2001 | −16.8% |
2013 | 26.7% | 1973 | −15.2% |
Kimberly Foss, CFP, CPWA, is a Financial Planning columnist and the founder and president of Empyrion Wealth Management in Roseville, Calif., and New York. Follow her on Twitter at
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