CHARLES CLAVER, VP/WEALTH MANAGEMENT ADVISOR AND INFINEX REPRESENTATIVE FIRST BANK WEALTH MANAGEMENT

With the recent market volatility, investors are increasingly anxious when reviewing their portfolios, along with the seemingly endless barrage of unsettling news around the globe, interest rate hikes, and gridlock in Washington.

After a decade of market growth, the sub-prime meltdown of February of 2009, when the stock market was down around 50% from its high, seems a distant, but still painful, memory. Market volatility, periodic corrections, and even recessions, are normal parts of the financial cycle. With these being the case, having a wealth management advisor is critical in maintaining a disciplined, balanced, and long- term view of the markets in order to successfully achieve your financial and wealth goals.

The financial markets are still a main investment avenue for most Americans. The good news is that the capital markets have rewarded long-term investors. The markets represent capitalism at work in the economy—and, historically, free markets have provided a long-term return that has more than offset inflation.

If we look at the monthly performance of various indices of the U.S. financial markets and inflation since 1926, the data illustrates the beneficial role of stocks in creating real wealth over time. Treasury bills have barely covered inflation, while longer-term bonds have provided higher returns over inflation. U.S. stock returns have far exceeded inflation and significantly outperformed bonds.

Graph for long term investment.

Even with this historic performance, there is still risk and uncertainty in the markets and historical results may not be repeated in the future. Nevertheless, the market is constantly pricing securities to reflect a positive expected return going forward. It is in volatile times like these that a wealth management advisor proves their worth in providing clients with a disciplined, balanced approach to investing and staying the course with a long-term investment strategy. A wealth management advisor should be part of your inner circle of trusted advisors, joining your attorney and CPA, in addressing your total financial needs that are in addition to your liquid investments. These other assets such as real estate and insurance should be addressed, along with estate and trust planning, to ensure a balanced and comprehensive approach. A wealth management advisor can customize an appropriate asset allocation for your investment portfolio that meets your personal risk tolerance, income needs, and both short and long-term financial goals.

When we consider the factors of time, diversification, and market volatility, it is important to invest for the long-term. For example, the average annual total return from 1950-2017 of a balanced 50% stocks and 50% bond portfolio was 9%. This was the result of a balanced asset allocation that is held long-term and not emotional market timing that changes an investment strategy based on short-term volatility and news of the day. (Past performance is not a guarantee of future results.)

The value of having a wealth management advisor begins with an initial review to understand the individual’s current situation, needs, resources, goals, and risk parameters. Next, it identifies gaps and concerns that may impede achievement of desired financial goals. Finally, a customized financial roadmap is created with input from other advisors, such as a CPA and attorney, to provide a custom and comprehensive financial plan. After all, your money should be working as hard for you as you are. Let’s get results.

Charles Claver is a Wealth Management Advisor for First Bank. Possessing 17 years of experience in the financial services field, his expertise includes private wealth, investment/retirement/estate, commercial/personal lines of insurance, and private banking.

Wealth Management products and services are provided through First Bank, and its affiliates and subsidiaries. Investment and insurance products are offered through INFINEX INVESTMENTS, INC., Member FINRA/SIPC. First Bank Wealth Management is a trade name of First Bank. Infinex and First Bank are not affiliated. Infinex does insurance business in California as Infinex Insurance Agency, CA Agency License #0H30186. Products and investment advisory services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value. Infinex does not offer legal or tax advice. Consult your legal and/or tax advisor for more details. Graph source: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.