Financial Planning Fridays #32: Keys to Reaching Your Goals

Today we wanted to discuss a common problem all around the world. As this episode airs, our CEO, Jerry Davidse, is 9,000 miles away from our headquarters giving a masters level class on financial planning and investment management in Siem Reap, Cambodia to120 of the future leaders of their country. Their economy is finally getting to the point where they can begin to think about saving and investing for the first time and it’s so important that they have future professionals who can help guide them.

The U.S. on the other hand, is the wealthiest country in the world by far and has been the wealthiest for 100 years. However, every year, millions of Americans are not able to reach their most important financial goals. We have identified 3 key reasons.

First, the majority of Americans do not have a written financial plan. It is well known that those who write down their goals are far more likely to achieve them. Your financial goals are no different.

According to a survey conducted by the Certified Financial Planning Board in 2021, only one-third of Americans have a written financial plan.

This means that two out of every three people you meet (outside of Presilium Private Wealth, of course) are unlikely to have any kind of written plan to reach their financial goals and consequently are much more likely not to reach them.

It can already be difficult to navigate market volatility as it is. It is even more difficult if you don’t have a plan for how your investments are going to help you to reach your goals.

Second, according to the same survey, only 17% of Americans have an investment policy statement that defines a target allocation for their portfolio.

Every University endowment, corporate pension plan, and large charitable organization have investment policy statements because they work.

To us, our clients’ goals are just as important. Therefore, all of our clients have a target investment allocation for their accounts at Presilium that is based on their financial plan. This is the allocation that we continuously rebalance back to when the market goes up or even more importantly- down.

Finally, almost no one has a defined, disciplined, and proactive strategy to adjust their investments as the market moves up or down. As you know, at Presilium, we rebalance your investment accounts every time the S&P 500 moves up or down five percent. This means that we will never be guessing whether the present moment is the top or the bottom of the market. Instead, we will be proactively taking action that will keep you on the right track to reach your long-term goals. That is due to the fact that every investment made in the S&P 500 after a 5% decline from the start of the index in 1926 until the end of 2020 have one thing in common. Can you guess what it is?

They are all profitable.

Every investment made in the S&P 500 from the start of the index in 1926 until the end of 2020 is profitable. If you are a long-term investor, why would you not buy more stock every time you have the chance? The only reason you wouldn’t is if you missed the opportunity because you were:
• waiting for it to go lower
• trying to time it just perfectly
• were stuck in a meeting at work, were out running an errand, or doing something other than watching your investments
The result? The opportunity disappeared quickly as they often do during very volatile times.

As history shows us, these all ultimately just end up as missed opportunities. At Presilium we are constantly on top of this for you. We have already helped hundreds of families to reach their goals but there are millions more that need help. We’re here for them, and for you.

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.