Chapter 9: Active Management for Investors on Wall Street and Main Street

Andy Horner  •  11/15/2014  •  Feature Presentation

Video Transcript

Offering a financial education is at the core of what we do. You’ve learned about The Power of Compound Interest and the Rule of 72. You’ve seen how an interest rate can impact how fast your money grows and how difficult it is to get back to even after suffering a loss.   

Now, I want to illustrate for you how we go beyond a financial education for our clients by providing access to tools aimed at helping investors grow their money while avoiding losses.

Let me start by asking you, how is your money being managed?

Fixed Account - You’re a saver and value safety and liquidity over potential for return.

Passive Management sometimes referred to as Buy & Hold – is a strategy in which you manage risk by allocating investments among a broad array of asset classes.  You then hold these assets for an extended period of time, regardless of market of conditions. Passive management investments offer broad diversification with generally low expenses and tax efficiency. However Passive Management does not defend against down markets and does not attempt to beat Index returns. 

Recall when I showed you the period of time from 1982 to 2000, in which the Market grew consistently without any major declines? A Passive Management strategy worked fine during those years. A rising tide lifts all boats. But since 2000, the turbulent ups and downs of the market have created treacherous waters for investors.  In these volatile times, many investors need more.

Active Management is a strategy in which your portfolio holdings can be adjusted on a continuous basis in response to market and economic conditions. This strategy offers the potential to protect against volatile markets by making tactical investment decisions. And, in theory, this strategy has the ability to defend against down markets.

The decision to choose saving or investing styles should be made in the context of your overall investment objectives and ability to tolerate risk. You could even choose a combination of strategies in a balanced approach to help achieve your overall investment goals.

We work with many third-party money managers who practice active investment management monitoring accounts and moving money as they deem appropriate based on their specific and objective criteria. The idea behind this strategy is to help investors reach their goals in both up and down markets. 

The financial crisis of 2008 showed investors, especially retirees, the dramatic impact a stock market decline can have on holdings, especially at the time when they need access to their investments. With life expectancy increasing and markets fluctuating, investors need help managing their money in these tough times.

With seemingly endless obstacles and issues to finding simple and efficient ways to put your money to work for you, we offer solutions – like access to different money management styles – that can help you manage your money and help you work toward a more sound financial future.

Once a tool for just the wealthy – now in the hands of everyday investors. 

Can you see how innovations like these position us to capture the opportunity of The Wealth Wave and how it enables us to help change lives? Can you see how it could change yours?

(Sources included in the video above.)