Ken Moraif, Senior Adviser, Jack discussed on Money Matters with Ken Moraif
Diamonds are forever. And we are back this is money matters with Ken moraif. And of course, I am your host Ken moraif. Thank you, Jack. I am senior adviser at retirement planners of America, and I have been a certified financial planner professional for the last twenty marvelous wonderful and very exciting years. And all of the ideas that we talk about on this show. These are the very same ideas. We talk about with our beloved and most valued clients, and we work primarily with people who are over the age of fifty who are retired or retiring soon. I do love it. And so we specialize in retirement planning. So if you are in that demo than this show is designed for you and the north central Texas Better Business Bureau, actually gave us last year, the torch award for ethics for a large company, and we're very proud of that designation because one of the things that is just the top of the list for us is ethics and, you know, we believe that in, in any walk of life, being ethical is important, but certainly in the business that we are in it is extremely important. So if you are not a client of ours. We'd love to visit with you. If you're over fifty retired or retiring soon, then as I said, that's who we would love to visit with. So this is the part of the show. We talk about our foundational philosophy about how we manage money for our clients, and our view of that. Now. As you are, when you're a younger person, and you are building towards your retirement, you are a long term investor. If you've got many years ahead of you and so taking large losses in your investments, is, you know, something you don't enjoy, but you can play through that. And you can keep buying you know, if you have a 4._0._1._K to your contributing to, or whatever then when the market goes down, you know, you keep plugging plowing money in you buying, the lower point, and all that good stuff. And that, that all I endorse. Now that in my view changes when you get within five years of your retirement, or the five years after your retirement that ten year period. And there are many studies that have shown it is the most important period of your entire financial life. And the reason is, is because no matter how well you did during the thirty years that you spent saving accumulating money to retire on, if you lose half of it, within six months of your retirement, then guess what? It's not. You know, in most cases, you're not gonna be able to retire anymore, and, you know, two thousand and eight that's basically that happened to a lot of people and they had to delay their retirement for five six years, and build it back up again, before they could retire resistant, pilgrim, I am do, because I believe strongly that protecting your principle is such an important part of retirement planning. Now, the other part of that is, if you're already retired. So, again, if you lost God forbid, half of your money in the next bear market, what would that do to your ability to support the lifestyle you want to live the way that you want? Would you be able to continue? And how scary would that be how many sleepless nights, would you have? So, you know, one of the things that is a traditional, you know, you've probably heard a lot is that you should be a buy, and hold investor and the idea behind that is that you buy a quality said of investments and then you diversify them and you rebalance periodically and then your job is done. And I think that's a. Great strategy for someone who is twenty thirty forty, but once you get over fifty I think you need to be United to start thinking about having an additional strategy, which is to protect what you've built because if you take a big loss, it may take a long time for you to build it back up again. And if you wanted to retire, you're already there, you may not be able to do that. Okay. So the by hold idea is that you're a long term investor and everything takes care of itself. So large losses are okay, and I could tell you, I don't believe that okay. One of the things that is in our strategy of buy, hold and sell said to sell in November of two thousand seven and said to stay in a rather to stay out for all of two thousand eight and didn't say to buy back until June of two thousand nine so for almost eighteen months, we were counting, our clients, and we're counseling, those of you who were listening to our show back then that you should be out of all equities. And you should protect yourself from that terrible bear market. Those that followed are. Advice. You know you didn't participate in all that carnage, now it last year in December. Our strategy said it was time to sell and the market as you may recall this and P fell precipitously, and it was very dramatic. But it recovered very quickly. And so you look at that, and you say, well, you know, can you told everybody to sell back then? And now you know you said to buy back, but we missed out on the on the rebound. And that's a terrible thing. Well, I agree. It's not fun to miss honoree bound, no question, but you have to ask yourself, what's the game that you're playing is the game that you're playing to make the most returns and take the risk associated with that, that it could be a bear market. And you could end up losing fifty seven percent of your money like what happened with the SNP in two thousand eight. Baby. Yeah. Or forty nine percent has happened with the SNP in Y2._K and other bear markets. We have losses of thirty seven percent on average. Is that worth the risk in our opinion it isn't? So if we see danger coming, then we essentially take vase of action, and if the market bounces back and we missed those returns on the buyback the choice, we've made is, I'd rather. Protect what I have in exchange for missing out on what I could have. Okay. So it's basically data quesion there is no perfect investment strategy. Unfortunately, I wish there was so you have to pick, what is the thing that you fear, the most or that you want the most and our goal for our clients is to have their money last as long as they do. Okay. So to do that losses are the biggest part of the question that can cause you not to achieve that goal. And so therefore, missing out on what you could've made yes, it's painful, and yes, it's it makes you unhappy because you want to participate and. I get that. But protecting your principle is more important in my opinion, you can live to fight another day. If you don't get killed in the battle that you're in. Okay. That's the important thing. Now, if you are retired or retiring soon if you are over fifty and you are about that you'd like to talk with a retirement.