Broker Check

I'm always glad to hear from you.....

July 19, 2018

Yes, I'm always glad to hear from you, your friends,  your co-workers, your family and extended family. So let's not let this dialogue and humor interfere with that, always call when you need to. This is about a call I get almost weekly, either from clients, referrals, or even advisors! Names have been changed to protect the innocent! Other advisors get this call often and we laugh and discuss the various ways it pans out. Here is one version of the call.

"Hi John, It's Martha Washington. I'm calling on behalf of George and I, he is in the garden pruning the Cherry Tree. I hope you are doing well. We have an idea we want you to research. It's called xxx Company. I heard about it from a friend. It pays an 11% dividend yield. What do you think?"

(Sometimes the above chat has 7% or 14% dividend yield mentioned. Just plug in a high number.)

"Thanks Martha for asking me, it's great you called me before doing something elsewhere. What does xxx do?"

"I don't know John, but they pay 11% like I said."

"Hmmm, Martha, George and you being 80 this year, and always concerned about risk, don't you think you should know what business xxx is in, before you think about committing your hard earned money there?"

"Sure, but our neighbor mentioned it, and her son is really smart and drives a Bentley you know, and maybe she heard from him. It does pay 11% you know."

(Now it gets more complicated for me. I need to help keep her from shooting herself in the proverbial foot, BUT also help her to help the neighbor protect her foot as well. I'll save that for another Blog episode.)

"Martha, a few points:

First-11% does not come risk free when blue chip companies pay 3-4% in dividends, and many have done so for 50+ years.

Second-The mutual funds and ETFs you own research thousands of companies, with teams of CFA's and analysts, nothing you hear about has not come across their radar yet. If it is attractive from a risk reward trade-off, they will add it.

Third-Warren Buffet has billions in petty cash in the Berkshire checkbook. He states he is looking for good ideas for us, his shareholders. If he thinks xxx is wise, he'll buy, and our mutual funds that you and I own will benefit that way.

Finally-Remember your strategy is a holistic approach, customized to you...your needs...your goals...your timeline...your health...your risk tolerance, your heirs...and dare I say, blah, blah, blah....a throw out to Seinfeld fans."

So the message here is simple:

A. Call me before you climb too far out on that ledge that is driven by emotion and media hype.

B. Remember it's about you personally, NOT some idea that applies to millions on the news, or your friend that is in an entirely different situation.

As always, my posts are public and free to be forwarded and shared openly. If you received this and aren't on my distribution list, simply let me know and my team will add you for future content.

Have a great finish to July, I look forward to our next chat!