CapSouth Monthly Newsletter – August

This week I’m featuring the Monthly Newsletter from CapSouth’s President, Donald Bolden. He’s not likely to ramble on about his kids breaking windshields or his failed attempts at a rope swing, but what you can count on are financial insights from an experienced business owner and all-around good guy. Back with you next week…

In the headlines for August:

More market volatility on the horizon?
Will the FED raise interest rates this year?
First Greece, then China. What’s next?

The question you’re left with:

What should we do?

For most of our clients the answer is – nothing. Studies have shown for years that one of the biggest factors affecting long-term returns is investor emotion. A report released by Vanguard in Dec. 2014 stated “the biggest value your advisor can provide is behavioral coaching.”

A good advisor or wealth manager provides a number of services including over twenty different components of investment management and financial, tax, and estate planning. Yet, the Vanguard study states that behavioral coaching provides the biggest value. Perhaps the best example of behavioral coaching involves managing the fears associated with daily news of all the problems in the world. Since I began my career as an advisor in 1994, we have encountered and survived many events that impacted the markets.

One role that an advisor should not play is “forecaster.” A weather forecaster has a reasonable chance of being somewhat accurate over the next few days. Trying to predict all the factors that impact the stock and bond markets is not part of an advisor’s job description. Rather, in the midst of uncertainty, our role is to try and provide clarity and direction.

My advice is the same today as it was yesterday:

• Develop and monitor a long range plan
• Determine a reasonable rate of return needed to accomplish your goals
• Diversify your investments
• Stay focused on the long term

If my team or I can be of any assistance to you, your family or your business, please don’t hesitate to give us a call. We’re happy to help. (Help, by the way, is definitely part of our job description.)

Donald P. Bolden, CFP®, CLU
President