Being Okay Can Help You Reach Your Goals

Dan WilliamsDan Williams, CFA, CFP, Investment Analyst

Simply being “okay” is often considered to be somewhat unsatisfying. Most companies aim for a consumer regard that’s higher than “okay” and the win-at-all-costs mindset is encouraged beginning at an early age. As Will Ferrell so aptly put it in Talladega Nights: The Ballad Of Ricky Bobby, “If you ain’t first, you’re last.”

It goes without saying that the efforts of financial advisors should always be of the highest standards and putting the needs of investors first and foremost. The aggressive pursuit of playing to win at the cost of finishing the race can be highly detrimental in the world of investments. Blindly seeking out the highest returns for the assets of an investor saving for retirement can wreak havoc and have potentially disastrous consequences.

The value of a financial advisor is not getting his/her clients to their goals in an exciting manner; but rather to get them there through reliable methods. For example, more often than not, making sure clients have insurance proves to be an unnecessary task, but in rare cases it can prevent financial catastrophe. Similarly, having 3-6 months of living expenses in liquid cash equivalent assets is often a performance drag, but it can prevent figurative flat tires from causing havoc on a clients’ life journey. The practice of dollar-cost averaging typically lags the performance of putting all of one’s money into the market immediately, but it ensures that investors are buffered from bad timing impacting their lump-sum purchase.Being Okay

This idea of spreading out risk translates well into an investment portfolio that is diversified across multiple asset classes. A meaningfully diversified portfolio may rarely hit performance homeruns, but it has the potential to get investors to their savings goals with less market volatility. At Brinker Capital, all of our investment portfolios are built on this idea of diversification. While an investors’ hindsight bias may cause them to regret not being 100 percent in the “right” asset class and frustrate the financial advisor who’s kept their clients on track, the reward for the proper long-term asset allocation is a successful completion of the race. Much like the tortoise of The Tortoise and the Hare, the journey may not be as quick as some would like, but continuous progress is made overtime to compound wealth and achieve a savings goal. Meaningfully diversified multi-asset class portfolios will fare better than all-equity portfolios in bear markets and better than all-fixed income portfolios in bull markets. In years when domestic equity and fixed income lag global market and alternative asset classes, diversified multi-asset class portfolios will bolster performance.

While most of us strive to achieve wins in life, at Brinker Capital, we believe that our diversified multi-asset portfolios leave investors okay. And, this is something of which we are truly proud of.

Memorial Day: A time to remember

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer

Did you know? The original meaning behind Memorial Day, which was officially proclaimed on May 5, 1868 by General John Logan, was to set aside time to remember the brave men and women who gave the ultimate sacrifice while serving the United States of America. We encourage all of you to take a moment over the weekend to remember the true meaning of the holiday and honor the men and women who sacrificed their lives for our freedom.

In observance of Memorial Day, Brinker Capital will be closed on Monday, May 29.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

 

Investment Insights Podcast: Five things that I learned this week

Rosenberger_PodcastAndrew Rosenberger, CFA, Senior Investment Manager

On this week’s podcast (recorded January 13, 2017), Andy discusses some of the facts, figures, and interesting tidbits we come across. Quick hits:

  • Families will spend an average of $233,610 per child, from birth through the age of 17.
  • The World Economic Forum’s top five risks are 1) Extreme weather events 2) Large-scale involuntary migration 3) Major natural disasters 4) Large-scale terrorist attacks and 5) Massive incident of data fraud or theft.
  • Student loan debt now tops $1.4 trillion dollars.
  • The currencies of India, Mexico, and Russia are all undervalued to the tune of 25-45%.
  • U.S. oil production is now beginning to increase again.

For Andy’s full insights, click here to listen to the audio recording.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, Inc., a Registered Investment Advisor.

Give thought to how you give this holiday season

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer

The holidays represent a time when many Americans express love and affection with gifts. Gift giving serves many purposes in our society. It helps define relationships, express feelings, show appreciation, smooth a disagreement, share good fortune, and strengthen bonds. While the joy of giving is undeniable, excessive spending could put your financial goals in jeopardy and ultimately stand in the way of happiness.

The American Research Group projects that the average person will spend $929 on gifts this holiday season. To put this amount in perspective, consider the following:

  • Last year, the average consumer spent $882, so this year consumers believe they will spend on average $47 more than last.
  • The last time consumers spending exceeded $900 was in 2006.
  • We’ve had a somewhat steady climb in spending since 2009 when the average person spent $417.
  • Gift spending peaked in 2001 when the average person spent $1,052 on holiday gifts.

live-simplyAs with any benchmark, the amount of money “the average person” spends on holiday gifts should bear little relevance on your spending. Whether you spend more or less than this projection is a personal choice that is best made with intention and with your own financial situation and goals in mind. These common holiday spending triggers, however, could get in the way of mindfulness and prompt you to spend more than intended.

Keeping up with others. If you try to match the amounts spent by colleagues, friends, family or peers, you could find yourself spending beyond your means and putting your financial goals in jeopardy.

Trying to be fair. A common cause of spend creep happens to create a sense of balance or fairness. When you overspend on one relative, you may be inclined to create equalization by matching the dollar value of gifts for others.

Just getting it done.  For some, holiday shopping is just another task in an already long list of things to accomplish by the end of the calendar year. It’s easy to overspend if you haven’t committed to a spending budget, decided who to buy for and what to get, and taken the time to seek out the best deals.

Autopilot. Sometimes we gift without considering whether the expenditure aligns with current realities. As families evolve, a discussion about how each member would like to celebrate the holidays may be worthwhile. For example, as your extended family grows, it may make sense to discuss a kids-only gift policy, put monetary limits on spending, or do a gift swap.

Self-purchases. Nearly sixty percent of holiday shoppers (58%) will buy for themselves and will spend on average of $139.61 doing so. This year’s projected self-spending is up 4% from 2015 and is at the second-highest level in National Retail Federation survey’s 13-year history.

The holidays only come once a year. Many people enter the holiday season as they would a free zone. They buy until they get to the end of their ever-growing list of recipients. They decorate until every square inch reflects the feeling of festivity in their heart. Unfortunately, many people do so without regard to the implications on short and mid-range financial goals and thus experience feelings of regret.

The act of gift giving has tremendous intrinsic and extrinsic value. A growing body of research suggests that the most important way in which money makes us happy is when we give it away. Gift giving at the expense of long-term financial goals, however, will bring anything but happiness.

Temptations beset all sides of the path to your financial dreams. During the holidays, temptations may take an altruistic form but still involve spending for today’s pleasures and forgetting about the Future You. This holiday season, give thought to how you give because the Future You is depending on your ability to be mindful, spot (over)spending triggers, and positively influence your ability to endure.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor

Addressing post-election anxiety

Crosby_2015Dr. Daniel Crosby, Executive Director, The Center for Outcomes & Founder, Nocturne Capital

Global events, such as the intensely divided presidential election that we just lived through, are certain to generate some periods of market volatility of varying lengths in addition to a significant amount of stress. However, we urge financial advisors and investors to retain a few dos and don’ts to help manage post-election anxiety:

Don’t equate risk with volatility. Volatility does not equal risk. Risk is the likelihood that you will not have the money to live the life you want to live. Paper losses are not “risk” and neither are the gyrations of a volatile market. Long term investors have been rewarded by equity markets, but those rewards come at the price of bravery during periods of short-term uncertainty.

Do know your history. Despite what political pundits and TV commentators would have you believe, this is not an unusually scary time to be alive. The economy continues to grow (slowly) and most quality of life statistics (crime, drug use, teen pregnancy) have been declining for years. Markets have always climbed a wall of worry, rewarding those who stay the course and punishing those who succumb to fear.

Don’t give in to action bias. At most times and in most situations, increased effort leads to improved outcomes. Investing is that rare world where doing less actually gets you more.

Do take responsibility. Most investors are likely to tell you that timing and returns are the biggest drivers of financial performance, but research tells another story. Research suggests that you are the best friend and the worst enemy of your own portfolio. Over the last 20 years, the market has returned roughly 8.25% per annum, but the average retail investor has kept just over 4% of those gains because of poor investment behavior.1 At times when market moves can feel haphazard, it helps to remember who is really in charge.

Don’t focus on the minute to minute. If you are investing in the stock market you have to think long-term. As mentioned above, you can avoid action bias by not checking your portfolio status all day every day, especially during times of higher volatility. Limited looking leads to increased feelings of security and improved decision-making.

Do work with a professional. Odds are that when you chose your financial advisor, you selected him or her because of their academic pedigree, years of experience or a sound investment philosophy. Ironically, what you may have overlooked is the largest value he or she adds—managing your behavior. Studies put the value added from working with an advisor at 2 to 3% per year. Compound that effect over a lifetime, and the power of financial advice quickly becomes evident.

Source: (1) Dalbar, Inc. Quantitative Analysis of Investor Behavior. Boston: Dalbar, 2015.

Views expressed are those of Brinker Capital, Inc. and are for informational/educational purposes.  Opinions and research referring to future actions or events, such as the future financial performance of certain asset classes, indexes or market segments, are based on the current expectations and projections about future events provided by various sources, including Brinker Capital’s Investment Management Group. Information contained within may be subject to change. Diversification does not assure a profit not guarantee against a loss.

Veterans Day: A time to say thank you

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer

Today we recognize those who have sacrificed careers, precious time with loved ones, and even their lives to answer our country’s call to service.

Please take a moment out of your busy day today to attend a Veterans Day event in your area or simply say thank you to those who are currently serving or have served in the military.

On this Veteran’s Day, we say thank you to our veterans at Brinker Capital—Chuck Widger, Tom Daley, Jimmy Dever, Lee Dolan, Jay O’Brien, Jim O’Hara, Jeff Raupp and Bill Talbot—and to everyone who has served and protected our country.

To be born free is an accident.
To live free is a privilege.
To die free is a responsibility.
–Brig. Gen. James Sehorn

If you’re looking for additional ways to get involved, click here for ideas.

Brinker Capital, Inc., a Registered Investment Advisor

Brinker Capital Founder and Executive Chairman Charles Widger Makes Historic $25 Million Investment in the Villanova University School of Law

Coyne_HeadshotJohn Coyne, Vice Chairman

All of us at Brinker Capital are proud to recognize the generosity of our founder and executive chairman, Chuck Widger, who has made a transformative $25 million investment in the Villanova University School of Law. In recognition, the school has been renamed the Villanova University Charles Widger School of Law.

Chuck, a 1973 Villanova School of Law grad, proudly refers to himself as a “Villanova lawyer,” and has remained involved with the school in various capacities over the years. He has played an active role in its efforts to revolutionize legal education by infusing vital business coursework and practical experience into the Villanova School of Law’s curriculum. Its tagline, “Where Law Meets Business” perfectly captures Chuck’s vision of what law schools should be doing to train tomorrow’s legal, business, government and nonprofit leaders.

Chuck_BlogChuck stated: “My investment in Villanova Law is an investment in the preservation of the two institutions that are vital to a free society, the rule of law and a market economy, both of which will enable us to flourish as a people for generations to come.”

Brinker Capital is pleased to recognize all of our Villanova alumni: Phil Green, Ping Guan, Ed Kelly, Neal McLaughlin, Jeff Raupp and Jamie Shoup.

More information about the Villanova University Charles Widger School of Law can be found at: http://www1.villanova.edu/villanova/law.html

Brinker Capital, a Registered Investment Advisor.

Thank You, Veterans

shutterstock_125204504In May of 2011, the Brinker Capital family lost one of its own in Charles “Chief” Burton, who passed away from cancer at the age of 65. As a former Naval officer, we remember Chief on this Veterans Day for the legacy he left and for his unique story that has become a part of our company culture.

During the Vietnam War, Chief was the captain of a PT (Patrol Torpedo) boat tasked with patrolling the rivers in search of enemy strongholds. On one particular instance, he was made aware of an order to take out an enemy village. It just so happened that Chief had recently been through the targeted village and knew that there were no enemy soldiers there. When he communicated this information to the general, he was sternly told to follow orders and continue as instructed. It was then that Chief made a decision that would impact not only his life, but the lives of countless others—he refused the order.

Refusing a direct order from a commanding officer got Chief court-martialed, but the decision to do so proved right. They determined that his intel was right and that there were only civilians in the village they were ordered to attack. Chief was later exonerated and served out his punishment—no ice cream for a week (or something equally as trivial). He would later receive the Navy’s Commendation medal.

Today, Brinker Capital presents the Chief Burton Award of Courage at the end of each year to honor an employee who has faced a difficult situation and met it with the same strength, integrity and bravery as Chief to overcome and make a difference. So on this Veteran’s Day, we say thank you to Chief, our other veterans at Brinker Capital—Chuck Widger, Lee Dolan, Tom Daley, Jeff Raupp, Jay O’Brien, Jim O’Hara and Bill Talbot—and to everyone who has served and protected our country.

Brinker Capital, Inc., a Registered Investment Advisor

Does Balance Truly Exist in the Lives of Professional Women? It’s Up to You

Noreen D. BeamanNoreen D. Beaman, Chief Executive Officer, Brinker Capital

Last week I had the pleasure of attending Financial Advisor magazine’s inaugural Invest in Women conference in Las Vegas. It was well attended by prominent and respected women of the financial services industry and it was a two-day agenda full of valuable discussions and presentations about all aspects of women in the financial industry.

Throughout the day-one discussions, the debate emerged about whether balance can truly exist in the lives of professional women. A few contended that a meaningful balance can be achieved but the majority concluded that, for most women, balance between career and family is an ever-shifting goal. At best, it’s a moving target that we may occasionally hit; most of the arrows we fire blindly sail past the target, leaving us struggling to find a way to “do it all.”

The story isn’t a new one—professional women have been trying to balance the needs of family and career (and self? – often that’s not even on the list) for many years with varying degrees of success. Most of the women at the conference agreed that it was a perpetual juggling act, often lasting for years, sometimes decades. Many have spent some time forsaking career for family and raising children. Others have spent time away from home, focused on growing a career and meeting the demands of their professional lives. And now as individuals are living longer, many are struggling with the task of supporting both aging parents and children while maintaining a successful and demanding career. Many have done all of it at one time or another.

shutterstock_99376793As we moved into day two, the discussions evolved as it became clearer that the answer to find what works best at any given time lies within each of us. There’s no consolation for those looking for the magic plan or formula, but the truth is that it’s upon each of us – male or female – to drive our own life choices and embrace the decisions we make. Balance is an elusive target, and the journey is personal and unique to each of us.

In my 20+ years of being part of the financial services industry, no employer has ever offered to take a back seat so that I could be more present for my children. My family has never declared, “We can handle everything from here, why don’t you spend more time focused on your career?” It’s on each of us to determine when and where to make sacrifices and to decide when to step back and when to dive in.

It’s not up to our family or our employer to make our choices for us. Every individual must assess their life situation with every change, evaluate their priorities, weigh the sacrifices and be willing to carry out the ones we choose. It’s sometimes easier to put the onus on others—whether work or family—to determine our level of engagement and then complain if we are being pulled too far in one direction. But if we truly own our decisions and acknowledge that we will make mistakes now and then, we empower ourselves to be more successful in both our careers and our lives.

The views expressed are those of Brinker Capital and are for informational purposes only. Brinker Capital, Inc., a Registered Investment Advisor.

Chasing Markets

Jeff RauppJeff Raupp, CFA, Senior Investment Manager, Brinker Capital

Back when I was in the U.S. Army, one thing I dreaded was the two-mile run as part of the Physical Fitness (PT) Test. I am not a runner. While most people would scoff at the notion of a two-mile run being intimidating, I looked at it as 13-14 minutes of pain. It was timed, and the better finishing times naturally resulted in a better score. Seemingly anything above 15 minutes resulted in a fail and, of course, more running.

One of the things I had the most trouble with was finding the right pace. I’d have instances where I’d try to run a balanced race only to end up having to sprint the last few hundred yards to reach my desired time. Then there were the times where I’d go out too hard and find myself stumbling into the finish line. The hills on the courses would complicate things – I’d kill myself trying to keep a constant pace uphill and downhill.

shutterstock_175699433After struggling with this for months, I came up with a better solution. We always ran as a group, and I found that I could usually find a few people that would consistently run around the same time I was looking for. Then my objective would be to keep up with them knowing that as long as I finished somewhere in their vicinity, I’d hit my goal.

The other day someone asked me whether investors’ financial goals should be to try to outperform the market, and with my response I thought there were a lot of similarities to my past running strategy.

An investor starts with an objective they’d like to get to, how much money they have, expected cash flows and their time horizon. From there it’s a matter of finding the right mix of asset classes that historically has shown a high probability of achieving the returns necessary to reach the objective(s). That mix can be thought of as your strategic plan.

Along the way, the market is a useful reference point. Investing isn’t a smooth journey, so when your strategy has drawdowns or grows faster than you expected, knowing how markets performed helps you determine if that’s just market volatility or if something may be wrong with your plan. Changing your strategic plan along the way can be dangerous, particularly at market extremes. If you’re always chasing the runner that looks the strongest at the moment, there’s a good chance you’ll burn out before the finish.

The views expressed are those of Brinker Capital and are for informational purposes only.