Global View Investment Blog

Why Most Successful Retirement Stories Start With a Financial Advisor

Since founding Global View in 2004, I have been asked a billion questions about investing. But when it comes down to it, what clients are usually searching for is the same: What is the key to financial freedom? How do I make mine one of the successful retirement stories I’ve heard about as opposed to one of the horror stories I fear? 

The secret in many cases is the right financial advisor; working with a financial fiduciary who understands the market and what the best investments are for you.

For example, many investors ask if they should invest outside the United States.

There is plenty to worry about around the world. But the problem with thinking this way, is that the valuations already reflect this thinking. The U.S. market represents more than half of the total world stock market. According to the CIA, the U.S. also represents less than one-fifth of the world economy. In fact, Europe and China have larger economies than ours but smaller stock markets. So, when enterprising investors ask, “Does this make sense?” well, it happened because of these fears. Investors bid up the price of the biggest, priciest U.S. stocks while ignoring many outside the United States.

This has happened before.

In 1991, when everyone feared that Japan was taking over the world, Japan rose to almost half of the world stock market. In 2000, the U.S. stock market again became half. We all know how this played out both times.

I’m not suggesting that the U.S. market will crash, but I am suggesting that investors need to think differently.

The best indicator of long-term stock returns is valuation. The United States is by far the most expensive in the world. Today’s valuations, in fact, suggest that U.S. stocks may only return 1 to 3 percent per year. International stocks may return 8 to 10 percent and emerging market stocks are likely to do much better.

While the short-term returns of these stocks can be volatile, this volatility represents an opportunity for enterprising investors. Unfortunately, for most investors, volatility means risk, which manifests when investors sell. In the last 20 years, retail investors in the largest fund in the world, the Vanguard S&P 500 fund, made 3.2 percent per year. This happened because they became fearful and sold during the last two bear markets.

Most investors have more than 90 percent of their risk budget allocated to U.S. stocks – one-third in index funds and we estimate most of the remaining two-thirds in clause and index funds that substantially look like the indexes in terms of risk. Investors are not likely to do well in these.

Based on the mass discrepancies of valuations, at Global View, we will not ignore our own country, but we do believe we have to be very careful. We try to look for wide moats, reasonable growth and decent valuations. We also believe that with 75 percent of the economy outside of the U.S., it makes sense to put half of your risk budget there.

If you’re not already a client, we would like the opportunity to show you the amount of risk you’re taking in your 401k with other investments and present alternatives.


Want to learn more about how Global View finds quality stocks in the United States and overseas? Contact us.


What Does This Mean For You?

If you’re a financial planning Do It Yourselfer, it’s important to take this information into consideration when building a portfolio. If you’re working with a financial advisor, it’s crucial that he or she understands your full situation and therefore can recommend what products are best for you. The only way you can guarantee this is by working with a fee-only fiduciary, someone who is obligated to put your best interests first; not theirs and not the stockholders.

At Global View, all of our financial advisors are fiduciaries. And we enlist the help of an entire team of professionals.

A comprehensive financial plan is your roadmap to the life and retirement you want. The bigger your goals and dreams, the more important good financial advice is. It’s vital to success.

If you take anything from this, understand that not all “financial plans” are created equal. Plans by big, name-brand, Wall Street firms are typically designed to support the firm’s products. These plans are often deliberately complicated. Remember, the financial services industry is a confusopoly by design. Wall Street uses investors’ lack of a good understanding of financial jargon to their benefit.

At a firm like Global View, we’re fee-only, meaning we don’t sell products. Because we have seen investors make bad, preventable mistakes time and time again, we created a straightforward process to put every investor on the right path. It may be hard to believe, but we have no hidden agenda. We simply want to help investors protect their wealth. (I guess we do want the unscrupulous salespeople who prey on investors’ ignorance to lose.)


Why Hire a Financial Advisor

Whether you’re a lifelong Do It Yourselfer or just don’t see the value of hiring someone for ongoing advisory services, I urge you to do a little research. The right advisor should work as your financial advocate. The right decision could be the difference between a financial horror story and one of the very successful retirement stories we know are possible.

I understand – there are many financial horror stories out there that make investors leery. But that’s why your advisor needs to be a true expert who won’t sell you products and can create a comprehensive roadmap that you can follow.

I feel strongly about this, and that is why Global View offers a service called Setting the Path. Essentially, it’s a test drive of our services. We feel this is a great way to make sure you are tackling the key issues standing between you and your goals. If after meeting with us, a client is still adamant about doing it on his or her own, they’re free to make the specific investment decisions and implement the plan on their own.

As a prospective client going through this process, you may learn there are some things that you didn’t know you didn’t know.

If you’re interested in making your New Year’s Resolution getting on a better track financially to reach your retirement goals, contact us to see how we can help. Global View offers comprehensive financial planning, worry-free portfolio management and estate planning. We invest right alongside our clients and have skin in the game as well.

Hiring a financial advisor may be one of the most important decisions in your lifetime. Don’t take the decision lightly. Make sure yours is one of the successful retirement stories you want it to be!


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Ken Moore

Written by Ken Moore

Ken’s focus is on investment strategy, research and analysis as well as financial planning strategy. Ken plays the lead role of our team identifying investments that fit the philosophy of the Global View approach. He is a strict adherent to Margin of Safety investment principles and has a strong belief in the power of business cycles. On a personal note, Ken was born in 1964 in Lexington Virginia, has been married since 1991. Immediately before locating to Greenville in 1997, Ken lived in New York City.

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