“The Dow is taking off like a rocket and XYZ stock tripled in value already this year, so why am I invested in treasury bills and an underperforming conservative portfolio?”
With the Dow Jones Industrial Average notching the ninth straight day of gains and certain stocks recording remarkable returns, the fear of missing out (FOMO) is a natural concern for many investors, especially those who avoided stocks because they feared the US was heading into a recession. However, in the dynamic realm of finance, finding the right investment strategy is a deeply personal and unique journey. As an attorney and financial advisor at EsqWealth, I recognize that each client has distinct financial goals, risk tolerances, and levels of wealth. Crafting personalized investment strategies lies at the core of my approach, ensuring that investments align perfectly with each client’s aspirations.
Different Experiences Based on Different Circumstances
I often engage in candid discussions about investment strategies with my friends and clients, sharing our successes, choices, and valuable lessons learned. A friend and colleague recently shared the remarkable gains he experienced this year alone while investing in the top seven stocks in the S&P 500.
At the same time, another client is content but is experiencing a little FOMO as he is earning 5% from his safe investments in T-Bills. At the end of 2021, he made a significant decision to move a large portion of his portfolio from stocks to cash and T-Bills, considering what he viewed as uncertain market conditions. Some may perceive his move as an attempt to time the market, but after considerable analysis, I thought his approach was grounded in a more substantial foundation based on his unique circumstances, his risk tolerance, his age, and his wealth (he already had more than enough money to retire and live off dividends alone). It was a measured and calculated approach to wealth preservation during uncertain times as he approached his retirement age.
Avoiding Market Timing and Embracing a Calculated Approach
Financial wisdom dictates that trying to time the market rarely leads to lasting wealth. Not even the best investors in the world try to time the market. “We haven’t the faintest idea what the stock market is gonna do when it opens on Monday — we never have,” Berkshire Hathaway Chairman and CEO Warren Buffett said during the company’s annual shareholders meeting in 2022. “I don’t think we’ve ever made a decision where either one of us has either said or been thinking: ‘We should buy or sell based on what the market is going to do,’” Buffett added, referring to his longtime business partner Charlie Munger.
Rather than attempting to time the market or make short-term decisions based on what the stock market is doing right now, long-term financial planning involves understanding each client’s unique financial goals, risk tolerance, and long-term aspirations. This approach allows my clients to stay invested confidently, whether that’s in T-Bills or growth stocks, and stay aligned with their individual circumstances and goals.
Personalized Strategies for Diverse Goals
Over the past 30 years, I’ve worked with well over a dozen different financial advisors and brokers. I realized that nearly all of them follow a one-size-fits-all approach, applying the same portfolio to all of their clients. With the hundreds of clients that most financial advisors try to serve, this approach should not be surprising. It is very unlikely that even the most skilled advisor could create, monitor, and make regular adjustments to personalized financial plans and portfolios for even 100 clients. Barron’s issues a report every year about the “Top Financial Advisors.” In 2016, the Barron’s report had this to say: “This year’s Top 1,200 serve 521 households on average, compared with 496 for 2015’s crop.”
At EsqWealth, our approach is different. I firmly believe that personalized strategies are the key to lasting financial success. We focus on building strong relationships with a select number of clients—20 to 25—allowing us to craft truly personalized comprehensive financial plans. Just as no two individuals are alike, no two investment plans should be identical. I firmly believe that your investment journey is uniquely yours, shaped by your aspirations, risk tolerance, and wealth level.
Conclusion
In the ever-changing world of finance, personalized investing is a source of strength and security. At EsqWealth, our approach revolves around each client’s specific goals, values, and circumstances. We discourage clients from reacting to the daily news headlines or changing their strategy based on short-term market movements. Rather, we embrace a rational and calculated strategy that preserves and grows wealth over time, driven by each client’s financial aspirations and our collaborative efforts.
