DOLLARS AND SEN$E: The absence of advice in the age of information overload

BY CHRIS HANLY

Investment Consultant, Gary Goldberg Financial Services

Pick a financial source, be it this column or your favorite financial website or any of the financial programs on television (they won’t let me mention names of the peacocks, foxes or former mayors). All of these have at least two things in common – they provide a lot of good information, but absolutely no advice. This can be particularly dangerous for younger investors who are just starting out – they are often mislead to believe that information and advice are one and the same when it comes to savings and investing. Of course there is some information that translates into good advice – for instance, having six to 12 months of expenses in a savings account in the event you lose your job or another unforeseen event occurs. But once you’ve accomplished this not-so-easy feat, you have some important decisions to make. Here are some critical questions that need answers:

· How much will you need to save every month to ensure that you can live as well or better than your parents during retirement

· What is a reasonable expectation of investment returns after costs and inflation

· What are your life expectations – i.e. do you plan on getting married, have children, etc…

These are just the very basic questions; we haven’t even gotten to any advice yet. Advice starts with a thorough understanding of the above as well as your personality as an investor. From there, we build a roadmap utilizing our proprietary and trademarked Montebello Process® which helps identify the sum of money that needs to be saved and ultimately allocated to ensure you are able to meet your short-term, intermediate, and long-term objectives. The importance and benefit of The Montebello Process® is that it helps greatly reduce the anxiety that is inevitably associated with and created by a market correction.

While many people, especially younger investors, understand and believe that markets will correct but ultimately rebound (just look at the extreme example of 2008 & 2009 and what has happened since), behavior resulting from such a correction differs greatly. Many like to think that they will remain calm, cool and collected if markets sell-off, but when they see their portfolio value cut in half, the actual reaction can be quite different. Our first-hand experience during 2008 and 2009 was that most clients remained calm and didn’t change course based on emotional overreactions – they were comfortable and had (still have) faith that The Montebello Process® would work and keep them on track.

To learn more visit www.ggfs.com or contact Chris Hanly directly at 800-433-0323 extension 247.

Christopher Hanly is an investment consultant with Gary Goldberg Financial Services in Suffern and can be reached at 845-368-2900 ext. 247 or [email protected].