A fiduciary is defined as an individual or a legal entity, such as a financial advisor. The fiduciary takes on the responsibility and has the power to act in the interest of another. This other person is called a beneficiary or principal—we call them member, human, or client.

A fiduciary financial advisor (which is all we have at Human Investing) cannot sell products that charge or pay commissions.

When a member works with a Human Investing financial advisor, the client gives the advisor their trust and expects recommendations to be made with honesty and good faith in keeping with their best interests. This may not always be the case with a non-fiduciary advisor.

The Fiduciary Standard

All Human Investing employees are required to abide by the fiduciary standard. When a financial advisor has a fiduciary duty, they must always act in the beneficiary's best interest.

Financial advisors fall into two buckets: fiduciaries and non-fiduciaries. Surprisingly, not all financial advisors have a requirement to put member's interests first. Worse yet, some advisors and their firms can be dually registered, swapping back and forth between fiduciary and non-fiduciary roles.

Suitability Standard vs. Fiduciary Standard

Financial professionals who are not fiduciaries are held to a lesser standard known as the "suitability standard." What this means is that the recommendation from a non-fiduciary only needs to be adequate.

Other Watch Outs When selecting an Advisor

If an advisor states that they have FINRA Series 7, 6, or 63, that means they are licensed to sell products for commissions. An advisor would only have those licenses for two reasons: 1) to sell commission products or 2) collect commissions from products they (or someone else) have sold.

There are many individuals and firms that say they are financial planners and do financial planning. But did you know that many of the people that say they are financial planners are not trained in the process and profession of being a financial planner? Individuals responsible for member financial planning are CERTIFIED FINANCIAL PLANNERS™. A CERTIFIED FINANCIAL PLANNER™ certification is “the standard of excellence in financial planning. CFP® professionals meet rigorous education, training and ethical standards, and are committed to serving their clients' best interests today to prepare them for a more secure tomorrow.”

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Are you retiring from PERS soon? Provided below is a concise breakdown of the most common benefit options and what they mean.

Often it makes the most sense to receive a lesser monthly benefit while protecting your loved ones with a survivorship option. Comparatively, it is like paying insurance monthly to ensure there is income for your beneficiary if you should die prematurely.

There are many more factors to consider, but a written estimate and analysis in coordination with your financial plan will provide a platform for deciding the best option for you and your family.

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As 2020 comes to an end, our team is sharing seven charts that help summarize some of the puzzling financial activity we experienced this year. We have been including these charts in our group education meetings as visual aids to help explain 2020’s market volatility. For the readers who did not attend one of these meetings, we made this post for you to reference in the future.

2020 was a year that represented a disconnect between the stock market and the economy for many investors. On one hand, the stock market (represented by the S&P 500) is up over 14% this year. On the other hand, many local businesses and industries have been devastated by the pandemic. Investors had a difficult time sorting out those two facts, especially between late March and September.

In order to rationalize 2020 market returns, we look to the five largest companies in the S&P 500 (in chart 1 and 2) that have led the charge in terms in performance. Specifically, these five companies are Microsoft, Apple, Amazon, Google, and Facebook. Compared to industries like airlines, hotels, and restaurants, these five companies were able to offer services and be agile in the pandemic. Couple that with those five companies making up over 21% of the stock market (the largest piece of the pie chart in the last years) and you can create a narrative of why the market has performed well while areas of the economy have struggled.

Repeat after me, past performance does not guarantee future results. It’s important to remember that now more than ever because 2020 produced some impressive returns. Combine that with 2020 being a year where Robinhood investors, or in other words younger investors who had more free time on their hands, became interested in the stock market, options trading, crypto currencies, and other investments. What’s interesting about 2020 is that many of the names or asset classes that people are familiar with or use every day happened to be some of the best performers of the year. Years like this don’t always play out this way, but Peter Lynch’s quote of “Invest in what you know” certainty paid off this year with individual’s taking products that they own/use frequently and investing in them. The above provides a sampling of some of top performers of 2020. As you can see you probably interact with of these line items daily. 

While what we have experienced nationally (and globally) this year has been unprecedented, in the context of the last 40 years of market returns it is not abnormal. Since the start of 1980, the S&P500 (excluding dividends) has returned an annualized 9%. Despite having average intra-year drops of 13.8%, the market has finished positive 75% of the time. Short-term market volatility has paved the way to long-term investment returns, and 2020 has proven no different.

For us investors, this is a reminder to remain invested through the market turbulence. Patience is a requirement for long-term success. Warren Buffet said it best with his quote, 

“The stock market is a device for transferring money from the impatient to the patient.” - Warren Buffet

This chart illustrates the consequences of hitting the “panic button” when we experience market turbulence. If we buckle up and hang on tight, there is potential to see long term growth versus throwing on the parachute and cashing out (hitting that proverbial panic button). 

Opportunists unite. With historically low interest rates, many people have taken this opportunity to refinance their mortgages. By refinancing their mortgages, individuals and families have improved monthly cash flow, decreased the amount of interest paid over the life of their loan (often saving tens of thousands of dollars over a 15-, 20-, or 30-year period), and shortened the length of their mortgage. To join the rest of the opportunists, see our post Refinancing Your Mortgage: A How to Guide. 

In March alone, the number of initial unemployment insurance (UI) claims increased by more than 3,000% as businesses closed to slow the spread of the coronavirus. People have suffered this year, and none of us will look back at this time and wish we did less.

This graph focuses on unemployment, but we know that hospitalizations, closures, and fear also increased in the first half of 2020. In a time of desperation, our communities responded to the suffering in an inspiring way. Specifically, the number of small charitable donations ($250 or less) increased 19.2% over the first six months of 2020 compared to 2019. You know someone who has been unemployed this year, and you also know someone who used dollars to alleviate some of the widespread grief.

We hope these visuals help you digest some financial information from this past year. We don’t know how 2021 will unfold, but we do know that market timing is dangerous and most of the time impossible. Staying the course is candidly a boring investment strategy, but one that typically yields the best results.  

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A combination of recent tax cuts, swelling government debt and changing political winds have many concerned about increases in future tax rates.  This has created a growing interest in strategies that can lower and mitigate future income taxes. One such strategy is available and often missed by many Nike employees within their 401(k) plan, known as “Mega Backdoor Roth 401(k) contributions”. While the name often elicits laughter at first, it can in fact be a serious and tangible way to save on future income taxes. 

What is the Nike Mega Backdoor Roth 401(k)?

The Mega Backdoor Roth 401(k) provides the ability to make additional tax-advantaged contributions to the Nike 401(k) plan above and beyond the typical employee limits of $19,500, plus catch-up contributions of $6,500 for ages 50+ (2020).  The additional contributions are in the form of “after-tax” contributions of up to 3% of income.  This applies to base salary and any PSP bonus. The total contribution amount will have a cap based on annual IRS limitations: $8,550 for 2020 and $8,700 for 2021.  The after-tax contributions can then be converted to Roth dollars within the plan, which allow them to grow tax-free and be distributed tax-free* in the future. 

How to Execute the Strategy

The process starts by electing to make after-tax contributions within the Nike 401(k) plan of up to 3%.  Once the after-tax contributions have been made, it is important to then convert these contributions into tax-free Roth funds* by periodically electing to do an “In-Plan Roth Conversion”.  To complete the In-Plan Roth Conversion, the employee will need to call the Nike 401(k) phone line and make the request verbally.  Be prepared to spend 10-15 minutes on the phone for the conversion process to be completed.     

The In-Plan Roth Conversion is important because the growth of the after-tax contributions will become taxable as ordinary income upon distribution if the conversion is never completed. However, if you convert those funds into Roth dollars, then the future growth and distributions will be tax-free*. We recommend that the In-Plan Roth conversion be completed on a periodic basis to make sure that the funds are converted before any significant growth occurs.  Any growth of the after-tax contributions at the time of this conversion will be taxable income, but if completed regularly, the growth and subsequent tax is typically minimal.  Ideally the conversion would be completed after every payroll or monthly, but practically speaking, one to two times per year should be sufficient to effectively execute the strategy.

Is this Strategy Right for You?

Nike’s robust benefit options can leave many unsure of which savings plan is best for them.  Whether it is 401(k) contributions, ESPP, Deferred Comp or Mega Backdoor 401(k) contributions, there are only so many dollars available out of a paycheck.  The order of priority is different for each person based on their personal tax situation, time frame at Nike, and plans for the future.  We believe that the best way to determine the priority of one plan over another is through financial planning projections. Through the financial planning process, we take your financial considerations today and project them into the future. While this does not predict the future, it does allow you to measure the impact of each savings option and find the optimal course of action.

Solution to Cash-Flow Problem

A potential solution to the cash-flow challenge of participating in the Mega Backdoor Roth 401(k) contributions is to repurpose other funds.  Available options that we have identified include existing after-tax accounts like Individual, Joint or Trust investment accounts, extra cash in the bank, or cash that you have from selling and diversifying out of Nike RSUs, ESPP, or Stock Options.  You can use these accounts to supplement your cash flow while the Mega Backdoor Roth contributions are coming out of your paycheck. 

Lower Your Tax Burden

While this strategy may not make sense for every Nike employee, it is a unique opportunity to get significant dollars into a Roth account that might not otherwise be available.  Whether or not income taxes actually do increase in the future, the Nike Mega Backdoor Roth 401(k) is a very effective way to lower your long-term tax burden and should be considered as part of your financial plan.

If you want to know more about how to take advantage of the Nike Mega Backdoor 401(k), please get in touch.

You can schedule time with me on Calendly, e-mail me at marc@humanvesting.com, or call or text me at (503) 608-2968.

*Assumes first Roth contribution made at least 5 years before withdrawal and withdrawals occur after age 59½.

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In March, we were inundated with updates about the coronavirus and the unknown ramifications to follow. In the same month that the NBA was postponed, children were sent home from school, toilet paper fled the grocery store shelves, the US stock market had three of the worst days in US history.

Behind the scenes

Unlike the year 2020, your 401(k) account is routine and emotionless. If there is no user interference (yes, that is you), your account will continue to invest in the stock market every paycheck. A 401(k) account can help alleviate market-timing decisions by adopting an investment strategy called dollar-cost averaging. Instead of waking up in the morning and deciding “is today a good day to buy some stock?”, your 401(k) systematically makes those timing decisions for you.

To review the ease of these timing decisions, I wanted to show investors what happened if you made a $50.00 contribution to your 401(k) account every paycheck during 2020. In this scenario, we assume employees were paid every two-weeks (starting on January 3, 2020) and invested in the Vanguard Target Retirement 2055 (VVFVX) fund.

Slowly building a foundation

These dollars represent the trading value of the Vanguard Target Retirement 2055 (VVFVX) on specific days. In this exercise, the lowest trading price was $31.16 on March 20th, and the highest trading price was $48.55 on November 27th.

Thank you, automation.

As you can see, the best time to invest in the stock market this year (March) was also arguably the most uncertain and scary time to be an individual investor. From a February 21st paycheck to a March 6th paycheck, the price of this target date fund dropped 9%. From a March 6th paycheck to a March 20th paycheck, the price dropped 21%.

When prices were falling, your 401(k) account bought shares at a lower price without panicking, consulting the news, or making impulsive decisions. For that reason, we should give 401(k) accounts a standing ovation for being a reliable, unemotional investment vehicle this year.

Let 2020 be a reminder that if your boxes are checked, outsourcing and automating your account is one way to ease your emotions.

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Perhaps now more than ever, it makes sense to increase your deferral to the SERPLUS deferred compensation plan. The following chart compares current tax rates to the proposed tax rates by the new administration.

Though we are uncertain when the tax changes will be implemented, we do know that tax rates will increase. If taxes increase, your deferred compensation benefits may become even more important for your tax planning.

TAP INTO Significant Tax and Income Benefits

Deferred compensation plans provide an opportunity to receive less income today in order to pay less taxes on that income when received in the future. When making annual deferred compensation elections, you have the choice of a 5-year, 10-year, or lump sum payment at retirement (when employment with Intel ends). If you plan to retire at 62, you could elect to receive distributions for 10 years from your SERPLUS plan to stretch out your income and realize it in a lower tax bracket until age 72. With this plan, you have deferred compensation income providing for your first 10 years of retirement. In your early 70’s, social security and required IRA distributions will supplement your steady income stream, and eventually replace your deferred compensation income.  

Spreading deferred compensation income out over 10 years allows you to take it in a lower tax bracket, like 21% for Federal and State combined or 24% combined after 2025. This tax deferral would provide for a tax reduction between 23% and 35%. In a hypothetical scenario, $50,000 contributed per year over 15 years would total $750,000 (without earnings computed). The income deferral could provide $172,500 in tax savings in a conservative example and $262,500 in savings in a more generous example. That is real money in your pocket rather than in the Federal and State governments. 

In the peak earning years of your life, with your 401k maxed out and not providing enough tax deferral and future income, the SERPLUS deferred compensation plan is a great tool to help increase both.

Cash Flow Considerations AND SOLUTIONS

If you do participate in the plan, your current take-home pay will decrease.  If cash flow becomes tight, there are opportunities within your employee benefits that could help provide the needed funds. It may be advisable to sell some company stock (ESPP, RSUs) to supplement your monthly income so that you can participate in the plan and defer income. Keep in mind, your election made in 2020 on salary is for the 2021 income year, whereas the bonus election is for the bonus paid in 2022. A portion of the bonus could be especially important to defer in 2022 considering the proposed tax changes. 

Questions ABOUT YOUR INTEL BENEFITS?

If you have questions about making deferred compensation elections, please schedule a call.

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Recently I received a note from a longtime Human Investing client. He was following up on a discussion we had back in March, where he, like others, was concerned about where the market was headed. Here is a mostly intact version of what he said:

I just wanted to thank you and acknowledge your sound advice eight months ago when everything was running off the edge. Since then, we are up more than $250K (17%) and above where we were then. The reality is that had I pulled out, I would not have gotten back in before missing most of the bounce back. Hindsight can be wonderful when you do not make the wrong decision!  My friend, who sold out in March, is still hanging onto the belief that we are headed down again. Who knows the future.

A Discussion Goes a Long Way

The purpose of this note is not to take a victory lap for the advice we dispensed. Instead, it highlights how a discussion can help put investing in perspective in a tense market moment. This client has 50% of their portfolio in safe investments, like high-credit quality bonds and cash. The remaining portion is in broadly diversified equities. Despite having enough cash and bonds on hand to live a decade without having to touch their equities, they had a concern. The discussion with this client revolved around whether they needed more than ten years of cash and bonds to live and focused less on market timing. In the end, it was the client who decided to hold tight, not me. I was the one who removed myself from the emotion of the situation and was there to ask the right questions. 

Throughout my career, my role in the client’s life has evolved. In the mid-90s, we were providing stock recommendations and picking money managers. Today, we rely on trading algorithms from Morningstar and low-cost index funds from Vanguard and Barclay’s. The quantitative work has shifted from money management to financial planning and tax planning/compliance. This work is done by my colleagues at Human Investing: Andrew Gladhill, CFA, Marc Kadomatsu, CFP, Amber Jones, CPA, and Luke Schultz, CPA. On the flip side of the quantitative work is qualitative research, which involves non-numerical data. Qualitative research comes from our interaction with clients and hearing about their feelings, emotions, and opinions. These qualitative insights are paramount to a successful retirement plan. Some might argue that emotion and opinion can derail the best of financial plans. This is at the heart of the above quote. Quantitatively, the client was in great shape, but their “in the moment emotions” almost derailed a great retirement plan. 

Dalbar Inc. provides performance information on the “average investor”. Figure 1 is a chart I have tracked for years. One of the many reasons why the “average investor” does so poorly versus the returns of various asset classes and stock/bond mixes is due to their emotions. Having someone to talk to about these thoughts and feelings can be helpful.  If the plan permits and valid concerns arise from the discussion, then changes can be made.  However, if the change is not rooted in probability and the financial plan, there is the potential that the decision being made can be harmful.

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Figure 1

Investing over the long run

It is interesting to see the S&P 500, dating back to the year I started in the financial services profession. Figure 2 depicts much relevant information. Most notably is the long term upward trending line during my career. If we went back to the early 1900s, the chart would look similar—lots of ups and downs with a trend line that moves up over time. 

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Figure 2

Sometimes, the drops in the market happen gradually—as do their recoveries (as was the case in 2000). Other times, market volatility stems from “counterparty risk,” which was the case in 2007 when the housing market and credit created uncertainty. In the most recent case, the severe volatility was brought upon by fear from a pandemic and an uncertain future. Regardless of the reason, volatility is a natural part of investing in the stock market. My observation is that volatility is permanent. Surprises (both up and down) are common. The financial plan, which is a quantitative document developed by credentialed experts, can be worth its weight in gold. It can act as a financial roadmap when you feel lost—and provide an advisor like me the data-points to dispense proper advice during anxious moments.

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On a recent financial planning call with colleague Amber Jones and a new client of our firm, we had a chance to discuss college savings for their daughter. It is always interesting to hear how families view college for their children and grandchildren. Some consider college a necessary expense, while others view college as an investment. Regardless of your college position, I thought it would be helpful to look at unemployment levels by education and income, based on the type of education an individual achieves. The numbers paint an incredible picture. Figure 1 underscores the importance of going to college. Not only are those with college degrees employed more consistently, but their annual earnings are nearly double those with a high school degree.

  Figure 1. Employment and income by education attainment

In short, Figure 1 makes a good case for encouraging your children (and grandchildren) to go to college. Yes, there are dozens of college alternatives, including starting a business or going to trade school. We all know successful individuals who never stepped foot in college or tried a university and decided it was not for them. I hope this article is taken in the way it was intended—that is, if college is an option, it is an excellent investment worth the sacrifice. 

Maybe you are a grandparent trying to think of a gift for your granddaughter—fund a college savings account. Maybe you are a parent wondering if college is a good investment—the answer is yes, fund a college savings account. Or possibly you are a teenager considering going to college—do what you can to make it happen. College is a sacrifice for families and for the one that is bold enough to attend.  Nevertheless, the payoff can be significant. As far as an investment goes, I can think of no better. 

If you have questions about college, funding a college savings account, or if you just want to have a thinking partner on the topic, call us; we would love to hear from you. College comes in many shapes and sizes. For example, a four-year degree, split between community college and Portland State University, averages less than $8,000 per year. Even if loans are required to meet tuition demands, the potential return on investment is immediate and over a lifetime, sizeable.

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On September 1st, my beautiful wife and I welcomed our new son into the world. His arrival has brought our family much joy during this season. Like all newborns, he has also brought sleepless nights, an abundance of comfort food, and disruption to our schedules and disciplines. As a result, I am here to tell you from personal experience the “dad bod” is real (find out if you have a dad bod here).

As I begin the journey to get back in shape, exercise and clean eating seem more difficult than ever before. Had I maintained my regimented sleep, diet, and exercise schedule throughout the entire pregnancy, returning to my baseline wouldn’t be as challenging. In physics, we call this inertia. In finance, we call this the compounding effect.  

Like most things in life, there is a compounding effect on our actions. 

• Consistency in showing up to work → proficiency at your job. 

• Consistency in showing up in the lives of loved ones → richer relationships. 

• Consistency with a sustainable diet and exercise plan → greater physical health. 

• Consistency in following a prudent investment strategy → increased net worth. 

Consistency is integral to the compounding effect

The inverse is also true. Disruption is a detriment to the compounding effect, a truth for our fitness as well as our investment accounts. To quote Charlie Munger, Warren Buffet's partner at Berkshire Hathaway —“The first rule of compounding is to never interrupt it unnecessarily”.

I would argue that someone’s consistency often has a greater impact than their effort and resources. Take the following example of two investors: 

• Investor A - saves $2K/year from age 26-65.  

• Investor B - saves $2K/year from age 19-26 and stops there.  

• Both achieve a 10% annual return.*  

At age 65, who ends up with more money?  

• Investor A: $883,185  

• Investor B: $941,054 

By saving and investing $2,000 at the beginning of each year from age 26 to 65 (39 total years), Investor A can expect to have a final balance of $883,185. Investor B only saves for 8 years but starts to save earlier in life than Investor A. Investor B benefits by taking advantage of 46 years of compounding growth, finishing with a balance of $941,054.

What Investor B lacks in consistency of contributions, they make up for in consistency of not interrupting the compounding effect on their investment account. I know you are probably curious, what would happen if Investor B did not stop contributing at age 26? Investor B’s account balance would be $1,902,309. Once again consistency wins out.

Start now and stick with it

• There are no shortcuts to saving for retirement and fighting the "dad bod". Starting can be difficult and sometimes painfully slow, however, the long-term results can be powerful. 

• The easiest advice to give is “never get off track.” However, like your sleep schedule with a newborn, there are some things you cannot control. It is important to know how to reassess and get back to work.  

• Building anything valuable and defensible takes time, effort, and energy. Build a plan today.  

If you want to compare notes on raising a newborn, see baby photos, or discuss the impact of consistency when building a prudent financial plan, please reach out. We are here for you.

*This is for illustrative and discussion purposes only. Investment results will vary.

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A lot has changed in 2020, but contributions limits will remain relatively consistent going forward. The IRS recently announced the 2021 contribution limits. The most notable change specific to retirement plans is that the annual deferred contribution limit will increase from $57,000 in 2020 to $58,000 in 2021.

Here are the applicable updates for the coming year.

Please let us know if you have any questions. We look forward to working with you in 2021. Take good care.

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A week ago, I came across a chart that does a nice job representing the call volume we have been experiencing at Human Investing in 2020. While the amount of calls we receive does not equal the amount of times people search for CNBC, the two data points are certainly correlated.

The image is titled, “When Markets Fall, We Search”, and ultimately shows that individuals have been more likely to seek out CNBC (market related news) any time the market has fallen over the last 15 years.

I’d argue that you could replace ‘search’ with ‘speculate’ and both the phrase and the chart would remain true, “when markets fall, we speculate”. Given the state of current affairs and the upcoming presidential election, individuals are worrying about their retirement accounts. A growing number of conversations our team has with individuals inside of retirement plans sound something like this:

Caller: “I’m fearful of (X) candidate winning the election because I’m affiliated with (Y) political party (both sides are saying this). Additionally, there is uncertainty around COVID, and I don’t feel comfortable staying invested during these unpredictable times. I’d like you (Human Investing) to help provide me with a more conservative investment recommendation.”

Before I respond with market research, I want to reiterate that you aren’t alone with your concerns and fear. We hear you. At the same time, before making any decisions related to your portfolio, take the time to think through all the angles of your decision. The rest of this post will hopefully provide some anecdotes in your process. Here are few thoughts about what it looks like to plan for the end of 2020 and into 2021. Remember, it is better to plan than to speculate.

The correlation between your Politics and Your Portfolio

Generally speaking, there is low correlation between political parties and the stock market. However, that statement is easy to say and difficult to live out in practice. Tread lightly when reading articles that try to align which stock/sectors to own with the political party that takes office. This article from 2016 couldn’t have been more wrong prognosticating that energy companies (specifically Exxon Mobile) would be top performers for the proceeding four years. It goes without saying this was a massive miss.

The bigger influence: Are you a speculator or planner?

If you think like a speculator, you will make rash decisions around your investment accounts and have no plan for re-entering the market if you move your dollars to cash or to a conservative investment.  

If you think like a planner, you will use both quantitative and qualitative measurements to evaluate your decision. For example:

• If you have a long-term horizon (greater than 15-20 years), political changes should not impact your investment decisions.

• Irrespective of the political environment, review if your account is too aggressive or too conservative for your financial landscape.

• Have a clear understanding of both candidate’s tax policies. Changes to the federal tax code should be a factor in your financial planning for the remainder of 2020 and into the future. If you are working with a CPA and/or Financial Advisor, make sure they are staying abreast with any impactful tax code changes.

  • Biden Tax Proposal

  • Trump Second Term Tax Ideas
    

Ditching The Market

Trying to time the market when negative news arises (or the anticipation of negative news) is a dangerous game to play. Luckily, we have a recent case study of how dangerous it can be. From January 1st to March 23rd, the stock market fell 30%. Since then, the market has recovered all losses and then some. If you were thinking like a spectator, it would have been easy to create a narrative around mid-March to pull your money out of the market and wait for greener pastures. If an investor did so, most likely that investor is still waiting for the market to dip and has missed out on the recent recovery as indicated by the second chart.

If you think like a planner when the market is more volatile, sometimes taking some form of action itches a behavioral scratch. Here are some ways to take action while not compromising your account:

• Raise your contribution in your retirement account to take advantage of a decreasing market (buying more shares at discounted prices).

• Open a small “fun money” account to track if your predictions are correct.

• If the market does significantly drop, look at converting pre-tax dollars to ROTH.

The concept of thinking like a speculator vs. thinking like a planner represents the cultural moment we are living in right now.

Speculating = headlines, fast moving social media, and the potential for instant gratification.

Planning = well thought out strategies that take time and often require no action.

As we head into this season of elections and COVID uncertainty, I hope this post provides some perspective on how to approach your portfolio. As always feel free to reach out to our team to talk through your thought process. We are happy to help!

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“Am I okay?” Fear ripe in my voice. 

We just heard what no climber ever wants to hear: one loud scream, three thuds, then nothing.

At that moment, I was sixty feet in the air doing the routine work of cleaning the anchor, removing all the gear that protected us as we climbed up the route and re-setting the rope to be lowered and move on to the next climb when we heard it.

That sound? It was someone falling. Hard. We didn’t know how far or how badly, but we knew that climb was higher than mine: about eighty feet top to earth.

“I got you!” He called back. “Take a deep breath. Tell me what you’re doing.”

I did. I called out every single step I was taking to clean the anchor and secure the rope back to my harness –triple checked for safety – and he held the rope. Eventually, my feet and wobbling legs arrived safely back on earth.

When you rock climb, there is obvious risk involved. Risk that you accept as the price of admission for moving higher than twenty feet – the height where, if you fall, you most likely will not be fatally injured. 

Confidence matters. Confidence in your gear, skill, weather, and your risk tolerance. Yet there is a confidence that is as important – if not more important – than all the confidence inside you: that is confidence in your belay partner.

Your partner is the one on the other end of the rope, your safety line, whose responsibility it is to pay attention, catch you when you fall, and lower you safely from sky to earth. A good belay partner must not only know the mechanics of climbing and safety but must also know you. They communicate clearly and are always paying attention – often mitigating the risks that are out of your control when you chose to leave the earth and head toward the open blue.

At no point after hearing those falling sounds did anything feel ok. My imagination was a wild hostage situation, forcing in front of my focus nightmares of gear failing and my body hurling through space.

But in reality, I was okay. I was safely anchored.  We had a plan and practice in place for climbing safely. My belay partner was paying attention, “I got you”. He heard the sounds too, but he did not take his focus off the rope and my safety.

Investing in the stock market can be a lot like rock climbing

There is risk involved in climbing your portfolio value higher than a modest, though acceptable, goal of beating inflation.

When the market takes a dive and the media heads are talking about total economic fall-out, it sure doesn’t feel okay. Do you have a good partner? A good advisor is a good partner. 

Are they paying attention? When you hear the rumble and scary sounds of the market moving and you call out, “Am I okay?”, how does your advisor respond?

At Human Investing, we are your partner on the other end of the rope

• Our climbing anchor is the fiduciary standard. Every trade, conversation, and piece of back-office work is done to mitigate unnecessary risk as your portfolio climbs, and it is all done with YOUR best interest in mind.

• Our figure-eight is clean and tight.  Your financial plan is like tying the climbing rope in to your harness – it is your safety line that serves to mitigate risk by informing how your dollars are invested to avoid and securely catch any falls. When the market crashes, we are on the other end of the line. 

• Our GriGri is loaded and locked.  We have the highest standard in investment tools.  We know our tools and we use them well, monitoring the “weather patterns” of the market, watching your portfolio as it climbs and responding as appropriate.

• “On Belay? Belay on! Climbing? Climb on!”  Before you climb you say to your partner:  Are you ready and paying attention?  We are paying attention and ready to serve you. There is more than one set of eyes on your accounts – you are more than dollars and stock holdings to us.  We will not be distracted by the noise around us.

• “I got you!”  As with any good partner: We know you.  We will respond to fear or a fall.  Your time with us is invested in discussing your goals, your values, and your reactions when your portfolio climbs or lurches.  We answer when you call, and sometimes we call you first because we also hear the sounds of the news and peers, and it may be scary. But in the end, we “got you.” We will not allow a fall-fear to inflict avoidable loss.

If you would like to talk to an advisor about how to climb your portfolio the Human Investing way, give us a call or send us an email.  It would be our pleasure to partner with you.

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