The Sterlings (Part 8): Between You and the Big Mistake

Read the different chapters of this story: 1234, 567, 89, 10)

Whether you think you’ve got the Midas touch when it comes to investments or are prone to fearfully reacting to price swings, trusting in your financial advisor’s process can prevent most disastrous decisions.

“Our portfolio always seemed a little rich for my blood,” Travis said to Amy, as they reviewed their latest investment report from their advisor.

Thanks to the market’s recent downturn, Amy didn’t know what was shrinking faster: their investments or Travis’ lack of confidence in John, their new financial advisor.

“Bad years can hurt a lot more when you’re investing 15% of your income,” he continued.

“I think our attempts at trying to choose our own investments hurt worse,” said Amy turning to Travis. “Or am I the only one who remembers what happened to that nice lump sum you inherited after some inspired stock picking?”

Amy continued, “You have zero patience, sweetheart. And if you call John in a semi-panic after the market goes down for only two days in a row, I wouldn’t be surprised if he fires us, instead.” With that, Amy turned on the TV and found a show that was less likely to instigate further financial conversation.

Amy had been relieved to find John. As a financial advisor, he was highly recommended by two of Amy’s fellow teachers. It was also refreshing to receive guidance from someone who cautioned patience while explaining the importance of asset allocation, as opposed to that pushy insurance salesman she had spoken with first. Plus John’s focus on only working with teachers and their families meant that he had already dealt with situations just like theirs.

But, as they opened another quarterly report, Travis and Amy’s investments saw a loss of twenty percent over the past year—a figure that even Amy found disconcerting. Deciding to nip any worries in the bud, she shot John a quick email asking to touch base and was pleased to hear her advisor’s pleasant voice when her phone rang only a few minutes later.

“Hi Amy, how can I help you?”

“John – thanks for calling! I hate to nit-pick at your advice, but I’ve been thinking about the choices we made and, well, we’re a bit concerned about risking our nest egg. Two hundred thousand dollars isn’t much to have invested at our age, but it is a lot to lose. Before making any knee-jerk decisions, I thought I’d reach out. Can you talk us off the ledge?”

 


 

Find out what John says to Amy in the book, found here.