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.

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