I think one of the primary benefits of working with a financial advisor is that they can help lay the foundation for a solid investment plan. Among other things, that means defining investors’ risk tolerance, time horizon and the appropriate asset mix to help them reach their goals. Everybody claims to have a high tolerance for risk until they lose money. Only then do they realize they should have been more diversified. That’s an important layer in an investment plan. Another key fundamental investors need to focus on is time horizon. Financial goals with different time horizons (i.e., investing for college versus retirement) require different strategies, so it’s important to understand the timeline for financial goals. Diversification is also essential to the foundation of a good investment plan. What should your asset mix be? Where should you be in terms of your fixed income allocation? Long duration? Short duration?
That’s where City Different can help. We partner with financial advisors, lending our expertise to theirs. Financial advisors know their clients better than we do, and we respect those relationships. But if a financial advisor needs more in-depth knowledge or has questions about what's going on in the markets, that's where we can provide expertise. Financial advisors can call us at any time and, whether they get me or my co-portfolio manager, Sweta Singh, on the phone, they’ll get the same answer to their questions. That kind of accessibility is important to financial advisors and their clients.
A financial advisor provides clients with annual financial checkups to ensure they stay on pace to meeting their goals. Volatility can knock an investment strategy off track. Consider what happened in the financial markets in 2021. Stocks did tremendously well while fixed income markets were askew. Every year — especially a year in which there were big fluctuations in the market — investors should sit down with a financial advisor to see if any portfolio adjustments are needed. People who set and forget their investments are often shocked when, down the road, they discover they are not as close to meeting their financial goals as they had anticipated. An annual checkup with a financial advisor can also assess whether changes in an investor’s life plans or goals necessitate adjustments to their portfolio.
City Different partners with financial advisors, providing open communication and transparency to align with their clients’ investment objectives. Transparency is one of the things that’s enabled us to build strong credibility with financial advisors. We offer our unvarnished opinion with the goal of providing advisors with the information they need to help clients reach their objectives. We believe that’s the best way to build credibility.
Emotions are running high right now as interest rates rise and prices for long duration fixed income assets decline. Stock markets are also down. We’re seeing a tug of war between fear and greed. Markets fall one day in reaction to geopolitical turmoil, Fed policy and inflation only to rally the very next day. It’s an emotionally charged environment that’s causing some people to get out of the markets. Financial advisors can help insulate investors from those emotions by offering advice to help them weather the storm and reminding them about the importance of staying invested so that they can participate when the market goes up.
City Different provides financial advisors with expert insights on the markets so that they can help their clients look beyond short-term noise. Early in my career, when I worked at Vanguard, part of my job was to get on the phone with individual investors. It was one of the most educational experiences of my career because it put me in tune with what individual investors were thinking — what they were scared of — and it impacted the way I made decisions for those constituents. Similarly, today I listen to financial advisors. I want to know what their clients are concerned about so that I can give them the information they need to make the best decision for their clients.
At City Different, our partnerships with financial advisors benefit from trust, transparency and a flow of information in both directions. We’re thrilled to share ideas about the markets and economy with advisors so that they can help their clients make informed decisions. We’re also just as interested in hearing from advisors about what their clients are saying and thinking. We believe this exchange of information exchange is an important part of helping investors achieve their goals.
To learn more about how we work with financial advisors and clients, the investment strategies we manage and our investment process, visit our website.
IMPORTANT DISCLOSURES
The information and statistics contained in this communication have been obtained from sources we believe to be reliable but cannot be guaranteed. Any projections, market outlooks or forecasts discussed herein are forward-looking statements and are based upon certain assumptions. Other events that were not taken into account may occur and may significantly affect the returns or performance of these investments. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, or any non-investment related content, made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. No discussion or information contained herein serves as the provision of, or as a substitute for, personalized investment advice. To the extent that a reader has any questions regarding the applicability above to his/her individual situation of any specific issue discussed, he/she is encouraged to consult with the professional advisor of his/her choosing. City Different Investments is neither a law firm nor a certified public accounting firm and no portion of this content should be construed as legal, tax, or accounting advice.