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By GARDNER SHERRILL |Investor’s Column

May 8, 2017

What Financial Information should I be paying attention to?

I am occasionally asked by a prospective client to cut to the chase and give investment advice.  They want to skip planning and jump right into portfolio design. 

There’s a fairly common perception that has been communicated by Wall Street and the media that our profession is more akin to TV celebrity Jim Cramer, who hosts Mad Money

Generally speaking, my experience has been that successful investing is goal-focused and planning-driven, while most of the failed investing I’ve observed has been market-focused and performance-driven.

Morningstar and Vanguard both published some interesting research speaking to the value of working with an advisor. While they both concluded that the profession provides significant value, neither spoke to stock tips or fund picking as a value add.

Their analysis placed a much higher emphasis on helping clients put their financial houses in order, coordinating their investments with their planning, and maintaining discipline during periods of market trauma. 

I liken our true value to a quote by General Omar Bradley – “You must navigate by the stars, not the lights of each passing ship.” 

So the question remains, what financial information should you be paying attention to? 

The following are four basic areas you want to make sure you have a good handle on and to review at least once a year.

Goals & Objectives

Where are you going?  The Cheshire cat told Alice,  "If you don't know where you're going then any road will do." 

Without direction, without a destination, without a goal, how do you pick a solution, choose a road, or plot a course to get “there”?  A professor once told me that if you can't measure something, it doesn't exist.  Defining your goals and measuring progress allows you to focus your efforts and find peace when surrounded by conflicting advice.

Personal Financial Statement

A personal financial statement reviews your assets, liabilities and insurance to better understand resources available to meet your goals. 

With an updated statement you can more effectively manage assets to generate short term income versus long term growth needs.   A good statement will also detail titling of assets and ensure you are best positioned for additional objectives such as asset protection, tax management and legacy goals.

Portfolio Construction

Investment management has adapted more in my 20 year career than at any other time - but strategically there are just a handful of strategies. 

By constructing a portfolio that is aligned with your family’s objectives you give yourself a much better chance at success. What’s important here is to find a strategy that makes sense to you, rebalance periodically and stick with it.  The big mistake comes when in the middle of chaotic markets, you tell yourself what Sir John Templeton deemed the four most dangerous words in investing “its different this time”.  Before you succumb to such a belief and sell out, I implore that you seek a qualified professional to run the numbers and review the ramifications.

Estate Planning

Estate planning is not just for the rich nor is it only about death.  By the time a couple reaches 65 the chances of one partner becoming incapacitated rises to over 50%. 

Without basic estate planning documents your loved ones will have a difficult time making medical and financial decisions on your behalf without a court order and possibly a guardianship appointment.  This, of course, takes time and money and can lead to additional frustration on top of dealing with an incapacitated spouse.Estate taxes have changed dramatically in the past several years and as such a review of your older documents would be in good order.  Additionally Powers of Attorney are often a source of conflict with financial institutions and should be reviewed regularly to ensure there are no issues with acceptance.

What’s most important to you and how can you best secure it?  Financially speaking, the answers are most likely not going to be found watching investment talk shows.  Focus on what you have most control over and put together a plan to best address the various issues.  Review your objectives and how your financial decisions are moving you towards your goals and away from potential obstacles.  Once you have put the time and effort into your plan, don’t forget to stop and smell the roses.

Gardner Sherrill, MBA, CFP is an independent financial planner with Shoreline Financial Partners.  To learn more visit shorelinefinancialpartners.com  Securities and advisory services offered through LPL Financial, A Registered Investment Advisor, Member FINRA / SIPC a registered investment advisor.Insert WordPress Content


Gardner Sherrill

After 17 years as a High Net Worth Private Banker I opened my firm in 2012 to create an unbiased and client-centered wealth management firm. As an independent advisor I can now solely focus on helping clients define and pursue their unique goals. Read More

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