Spring cleaning is here, taxes are coming due, the seasons are finally changing. Now is as good a time as any to dive in and review your strategy. Remember the adage, “proper planning prevents poor performance”? Here are seven C’s I use that will help you prepare for the good performance.
Curiosity – Can you do better? If you looked at your current situation, would it reflect your life? You started a new job, sold your business or funded an unexpected medical emergency. Now, does it make sense to investigate your financial life? The answer is usually… Yes!
Clarity – You’ve completed your review, we call it an investment MRI. You know where your accounts are, how much they are, what they hold and their purpose (or lack of purpose!). You have a good idea of your income and expenses for the year. You know how much you can afford to contribute to your portfolio. And it’s all on one page with a top level view. If you don’t have this when you need it, I encourage you to raise your expectations.
Coordination – Is your accountant in touch with your investment advisor? Does your investment advisor know if you can take another capital gain this year? You don’t have to do all the work. If you haven’t done it recently, my suggestion is to CC an email to your experts and tell them to talk to each other. Your experts include your trust lawyer, accountant, investment advisor and a trusted family member.
Consensus – Your experts are in line with your accounts, but do they agree? Your accountant says “don’t sell that security, it has a gain”. Your investment advisor says “do sell that security, it’s not worth the risk to you”. Let’s find a middle ground or give priority to the expert in each area. We want everyone rowing in the same direction.
Confidence – Months of mental energy and effort and still no action… You might think, “I can afford to wait another month…” But why? Decide with confidence and/or delegate the decisions to your staff and get the benefit. It’s not about hasty decisions, let the system be your strategy and allow it to go to work for you. Measure twice and cut once. But don’t forget to cut!
Construction – You have your plan. Now it’s time to do the paperwork, open the accounts and hit the buy and sell buttons. Construction is where theory turns into practice. Make sure your top level portfolio fits on top of each of your accounts. Like a contractor, make sure your portfolio looks right from 10,000 feet and at ground level. Preparation makes this a straightforward and painless process.
Commitment – Portfolios need changes for two reasons. Either your life changes and your risk needs to reflect that, or the market knocks you off balance. Update the plan when needed and allow your strategy to pan out. Take all the time you need, then dive deep to make sure you are getting the full benefit of your work.
Michael Jordan said, “Talent wins games but teamwork wins championships”. Solving any one of these steps is easy. Solving the whole thing takes real work. That’s what we’re here for.
Max Osbon – firstname.lastname@example.org
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