Farmers will plant the most acres in a generation this year, led by the biggest corn crop since World War II, taking advantage of the highest agricultural prices in at least four decades.Buy and hold? David Hefty doesn’t buy it.
When it comes to investing, Hefty said, it takes more strategy than that bit of conventional wisdom to ensure the best returns.
“From our personal experience, we made the shift at the beginning of the decade,” said Hefty, chief executive officer of Cornerstone Wealth Management in Auburn. “The way you have to view investments today, you need to separate out some of this noise from the past: Dividends don’t go down, bonds are safe.…You really have to approach a portfolio and look at those investments and look at where we are now and where we think we’re going to be in three months.”
Hefty isn’t suggesting that investors not consider various investment tools. But a financial adviser can help evaluate risks and potential upswings in areas where investors have money on the line, potentially preventing restless nights on those down days in the market.
“We anticipate the next 10 years to be just as volatile of a ride as the previous 10,” Hefty said.
Many investors let the past year’s downturn spook them out of the market, Hefty said. The problem is that many of them bailed at the end of last year or in the first quarter of this year when the market was at its lowest. They also probably failed to jump back in soon enough to reap the gains as the market recovered almost 50 percent of lost ground.
“It’s very, very typical, and it doesn’t have to be in major downturns like this” past year, Hefty said. “The one thing that has stayed constant is human behavior.”
Christopher Moore, a certified financial planner with Moore & Associates in Fort Wayne, said investors should ignore investing clichés and stick to the fundamentals, understand their strategy and plan accordingly. But plans have to be more specific than thinking that long-term investing is just about the “buy and hold” concept, said Moore, whose firm is a private wealth advisory practice of Ameriprise Financial Services Inc.
“Most people don’t have a plan, they just think they do,” Moore said. “Financial planning and investments is not easy. If it was easy, everybody would do it.”
Certified financial planner Deb Romary said the turmoil known as the “financial meltdown” in the past year was “all about greed.”
“We all got used to in excess of 10 percent returns in a year and we forgot that 6 (percent) and 7 percent look good,” said Romary, owner of Romary Financial Services Inc. in Fort Wayne.
“For me, traditional wisdom always had to do with the intimate nuances of the client’s personality. I have always tried to realize the risk tolerance level of a client and then be aware that that changes as we age.”
Romary said that since the collapse of Enron Corp. several years ago, there has been more concern about “a lack of transparency” in corporations, making investing more challenging. That was before the latest recession officially began in December 2007, adding another wrinkle.
But after 30 years, Romary still loves the business of helping others find a strategy to reach their investment and retirement goals.
“I love every day, and I intend to live long enough to see how this is all going to pan out,” she said. “My favorite line right now is the recession is a terrible thing to waste. In other words, what am I going to learn from this?”
