Client Newsletter 1Q19
Why a Financial Plan Is So Important!
Dear Ambassador Family,
Happy New Year! In order to think ahead, I believe it is critical to reflect objectively on the past.
Let’s do both in this letter.
We will discuss the benefits of having an up-to-date, strategic financial plan. Then I will explain how we sought to deepen our relationship with you in 2018 – and some plans for 2019.
Keeping Your Financial Plan Current Was Relevant in 2018
Let’s go back to 2017 for a moment. Many of you will remember that we had a fantastic year in the markets. Sometimes, strong markets spur complacency. We made an effort to steer our clients away from it.
We encouraged our clients to be proactive while markets were on our side. We advised you to develop a financial plan and be ready for a downturn, should it come. We also urged you to challenge yourselves with probing questions, such as:
- Where are you now?
- Where do you want to be?
- What is your timeline?
- How much volatility can you afford?
At the beginning of last year, we spoke again and cautioned that 2018 might not be as good of a year for your investments. Concerns about rising interest rates and their impact on asset bubbles in real estate and other areas suggested caution about the kinds of investments you chose to make.
I understand how easy it is to get caught up in your emotions when it comes to money. Some people are prone to falling in love with certain investments. Others of you are close to retirement and worry about your financial situation once your paychecks stop coming in. Others, who are already in retirement, might find it quite difficult to suffer a reduction in investment income.
2018 was an extremely volatile year. We saw two major market pullbacks, one in early 2018 and one later in the fourth quarter. In fact, the S&P 500 pulled back 20% from its peak on September 20th.
We were vigilant this year before and during the market decline. You might remember we started the year with a cautiously optimistic outlook and trimmed back that optimism in August. Additionally, we
adjusted your portfolios according to our conversations we have had to match your risk tolerance and time horizon.
Those that planned ahead in 2017 experienced solid returns and were in a better position to sustain their lifestyles in spite of the market volatility in 2018. (As I write this, markets have recovered some of their losses in early 2019. However, it would not surprise us to see continued volatility. You can read about our thoughts in the Investment Letter later.)
However, others who lacked a strategic financial plan were at greater risk. Some of them might be more inclined to make ill-informed choices based on negative emotions and not rational, strategic planning. Even with only moderate losses and a pickup in market volatility, they were more vulnerable to being made to panic by an obsession with the ups and downs of news produced by media outlets.
You have a greater chance to succeed when you have a strategic plan in place. The more we know about your timeline, risk tolerance, and liquidity needs, the more holistic and effective our strategies potentially can be to assist you in your personal journey.
More Ways We Built Relationships with You in 2018
We deepened our commitment to serving you in 2018. Here are some examples:
- Ambassador Website – we redesigned and launched our new website! This is a resource for you, your family and friends to find relevant content and learn more about our firm.
- Resource Center – in the last year, we have written 70 articles (and 4 white papers) on 7 topics relevant to you and other professionals who work with you. Learn about Financial Planning, Retirement, Investments, or even Travel.
- Client Portal – your personal website gives you greater access to your Financial Plan. You can see your family’s balance sheet, including accounts we manage on your behalf and other aspects of your net worth – bank accounts, loans, and other assets and investments. We can approach your situation holistically and recommend solutions relevant to your unique situation.
- Focused Email Campaigns – this provides yet another way for us to touch base with you. You can stay connected with us and share any relevant content with your friends, family, and other professionals you work with (Attorneys, CPAs, etc.).
Deepening Our Relationship with You in 2019
- We’re watching your money: The markets seemed to have corrected too much late last year and have started to recover. However, we are also mindful of risks from slower economic growth, trade wars, and tighter monetary policy globally. Your portfolios still have the opportunity for growth, but we are particularly mindful of downside risks.
- Staff: Chelsea Makhanov has joined us to learn and enhance our operations. Our full-time staff has now grown to 6 people.
- We continue to focus on clients like you: Clients who desire someone like us to engage them more deeply in their financial and personal affairs. We have added several new relationships in 2018. I personally want to thank those of you who have referred these new families to join us.
- Saying goodbye to others: As part of focusing on families like yours, we have also had to let go of a few who did not want to engage with us.
- Family Barometer Number to come: We have sent it to a few clients and professionals over the last couple of months. After receiving feedback, we are working to refine and clarify certain sections of this white paper. We are looking forward to making adjustments and releasing this paper sometime this year.
Our New Year’s Wish to You
When you go to see your doctor, you have one of two goals in mind: either you are sick and in need of treatment, or, you are proactively seeking out prevention. Everyone can and should do both. Our goal is to remind you that financial checks up are important, you are investing in yourself. We are here to help you make wise decisions with your finances.
In 2019, let’s make a Financial Plan. The more you invest in yourself, the better we can help you in achieving your financial goals and dreams. Don’t be shy. I and my staff are here to help you.
Thank you for working with us, we look forward to 2019.