How Do You Define Success?

SucessIt is no secret that the investment industry’s reputation has suffered in recent years. Between scandals, culture crises and underperforming active management, many are questioning the validity of the investment advisor model. Indeed, more and more are turning to DIY solutions of virtual advisors and online “e-vesting”. “So why even have an advisor?” The Economist goes so far as to ask in its recent article “Will Invest for Food.”

Carl Richards of The Behavior Gap answered this question in his recent article “What Do Real Advisors Do?” writing, “We are listening to investors when they tell us what matters most to them and helping them weigh the best options for aligning their values and their capital. We are providing an objective sounding board for all those times the market becomes a roller coaster and investors want to cash out and hide under the covers.”

At Balentine, we are not individual stock-pickers, we do not have a frenzied Jim Cramer-esque view of the world, and we do not try to “time” the market. Instead, our purpose is to help clients achieve their long-term goals taking the least amount of risk required. Said another way, we often counsel clients to do things that make them feel uncomfortable, for example, buying into the market in 2009 when fear was still rampant or advising clients today to focus on narrowing the range of potential outcomes while sentiment is so positive.

Furthermore, by taking a risk-first approach, we are also able to prevent clients from having to take money from portfolios during down markets. This is a subtle but important distinction, which David Damiani explores deeply in the article “The Case for Cash.” We immunize spending needs in our Liquid building block for those clients that spend out of portfolios, preventing permanent impairment of capital by selling assets at depressed prices.

Focusing on our clients’ goals enables us to take a long-term, individual and absolute view. No one person’s goals are the same, and we define success on a client-by-client basis. For foundations and endowments, success may be meeting a spending requirement without permanently impairing capital. For another couple, it may be creating a family foundation or retiring comfortably and traveling. Goals, and therefore definitions of success, change over time, and we are able to help clients adjust their investments accordingly. What’s more is that none of our clients have the same goal as the S&P 500. So why do so many still use that as the only measure of success?

And while each client has an individual goal, at Balentine our mission is simple. We want to see all clients reach their objectives. We achieve that by helping clients stay the course and remain committed to a long-term investment strategy even, perhaps especially, when it feels uncomfortable.

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