Suitable Investments and You

 

suit·a·bil·i·ty:  The quality of being right or appropriate for a particular person, purpose, or situation.

The definition of suitability seems quite easy to understand and should be clear when it comes to investment recommendations to clients.  However, many times when clients come to our firm the investments they have are not suitable for them. We base this conclusion on a set of objectives to consider.  Determining suitability includes an examination of the client’s demographics such as age, income, willingness to take on risk, and aversion to risk.  Additional factors include how long until the client liquidates the investment, likelihood of recovery from loss, and current financial health including personal debt, and tax considerations.  A suitable investment for a forty-five-year-old will look very different than an investment for someone entering retirement.

Only after getting to know our client through these objectives, or ‘facts’ can we start to develop an investment strategy.  Suitability is not always clear-cut and is often in flux. What seems like a suitable investment one day can change with the correction of the stock market, suddenly becoming an unsuitable one.  For this reason, constant monitoring of investments coupled with performance and the ever-evolving circumstances of the client make suitability critical to an overall investment strategy. We ask a lot of questions during our meetings for this reason.  

The client has a crucial role in their suitability as investor knowledge and understanding come into play inside their portfolio.  However, this doesn’t that mean that if an investor understands the investment and all associated risks, is it a suitable one. Unsuitable investments can ruin a portfolio and can be a source of on-going stress for the investor.  Our recommendations consider suitability, but for those investors that execute an investment on their initiatives outside our advice, there is not much the securities regulators, or we can do. Advice and suitability must come first, asset allocation second, and the execution of the investment last as a continuous process.  

Suitability is part of fiduciary standards.  We operate our business in this manner and are legally bound to recommend only suitable investments to our clients.  

3 Things being a Marine taught me about being a financial advisor

 

Hello, this is Jeff Junior, President, and CEO of Trajan Wealth. I’ve spent nearly two decades in financial services helping people manage their wealth, prepare for retirement, and manage the ever-changing financial landscape. But before I was serving my clients in the financial sector, I was serving my country as a Marine. Memorial Day is an important day for reflection as I honor my fellow servicemen and women who have served before, with and after me. This day is an opportunity for us to be grateful, and honor those who have made the ultimate sacrifice for us, our families and our country.

I learned a lot while in the Marines and have found three lessons in particular that now transfer to my role as a financial advisor.

The Real Cost of Credit

2017 was a challenging year for the credit industry. From the data breach at Equifax and multiple lawsuits that follow, it has been a tumultuous time for consumers to have faith in the world of credit. Unfortunately, it’s becoming apparent that for Americans overall, it’s not going to get any better in 2018 as the trend of acquiring more debt increases.

Aside from having to shell out money for damages caused in 2017, the credit industry will have a very lucrative 2018 even after paying fines and settlements thanks in part to the American consumer.

According to MarketWatch, U.S. households owe more than $1 trillion in credit-card debt, and the numbers are only rising. Your typical culprits of irresponsible spending that contribute to increasing credit card debt among Americans includes more access by those considered ‘subprime borrowers,’ increased costs for food and housing and continuous spending on unnecessary items. As the average household holds a balance of $15,983 on credit. The cost of maintaining a lifestyle beyond their means can cost a lot more than anticipated with interest rates on the rise.

Legacy Planning as Part of Life Planning

Leaving a legacy through the passing assets today and after your death is a process that requires correct planning and execution. With the recent Tax Cuts and Job Act of 2017, updated tax codes, and an ever-changing political environment, legacy planning requires consulting with multiple professionals in order to pass assets without financial consequences.

Legacy planning should always be a team effort involving an attorney, tax specialist, and your financial advisor if planning involves securities assets, or will benefit more than one generation, non-profit, or other entity. Transferring wealth has no ‘right or wrong’ way but is best the way that you prefer.

7 Tips to Avoid the Most Common Tax Scams

With the significant 2017 cybersecurity leaks involving the personal information of millions of Americans, this year’s tax season is expected to be one of the worst ever for tax scams. Aside from cybersecurity leaks, scammers also target HR departments via emails requesting employee information while posing as the IRS, which has corporations on edge to maintain the security of employee information.

This year’s tax season officially opens January 29th, 2018 and runs through April 17, 2018 and scammers are ready and waiting to file tax returns in the names of other people. Hundreds of thousands of people will file their taxes this year expecting a return, only to find out the return was sent somewhere else. What can you do to protect yourself?

Fear, Greed, and Your Portfolio

We like to think there are times when humans can be 100 percent rational, but in reality, our emotions are always influencing our decisions whether we want to acknowledge that fact or not.

In fact, one of the most famous mathematicians of all time, Godel, based his foundational incompleteness theorem partially on that point. The universe is likely objective, but humans cannot always objectively measure, observe, or even understand it.

So stop fighting your irrationality. You’re officially off the hook.

Fear plus greed and your finances

Is Retirement Really About Numbers?

For some people retirement is all about the numbers; the age you plan to retire, how much money you need, and so forth. But is retirement really about numbers?

Numbers give us a baseline to help you financially plan for today and the future. Your numbers can change throughout your life. Maybe you’re already retired or are within ten to twenty years of retiring, but one thing is clear; whether you love them or hate them, numbers play a role in all aspects of your financial life:

8 Ways the Tax Bill Could Affect You.

While much of the news is focused on the government shut down, for most Americans, it’s business as usual. The IRS is keeping 43% of it’s workforce up and running but wished to have more during the upcoming tax season. While the new tax laws won’t affect your 2017 returns, there are some things you should know as you move into the next few years. Here are 8 ways the tax bill may affect you.

How Staying Healthy Affects Your Retirement Portfolio

Every year in January, people make resolutions to maintain better health habits. Logically, we all know a healthy life style can help us live longer and improve quality of life but has it occurred to you that better health can even improve your retirement portfolio? Not only will you be healthier to enjoy activities but you’ll end up saving a tremendous amount on health care. According to this article from Fidelity Investments, retiree healthcare costs are continuing to rise. The estimate for retiree health care spending rises to an average of $275,000 per couple, excluding long-term care expenses. That’s an increase of $15,000 from 2016. Considering how expensive health care currently is, investing in your health now can pay huge dividends in the future. Here is a more detailed break down.

SmartVestor Investment Seminars with Jeff Junior.

 

Empower yourself with knowledge and avoid life-changing mistakes – Be confident in your financial decisions in 2018! Join local radio host, TV personality and Dave Ramsey advisor, Jeff Junior for a complimentary meal and educational seminar at Flemings Steakhouse and learn: 

What does it mean to be a Dave Ramsey Smartvestor advisor and how does that benefit you? 

What is a “trusted fiduciary” and why is he or she bound and focused, solely on your best interest.

Why a first or even second financial opinion is critical to surviving 20-40 years of retirement.

How to be confident you’re making the best choices with your life altering decisions

What makes Trajan Wealth different and better than others.
– and much more!

Seating is limited and the event will fill quickly.  Please call 480-990-3300 for more information and to reserve your seat. 

Trajan Wealth

Trajan Wealth helps our clients prepare for a successful future through financial options that are best for your lifestyle. Speak to our financial team today about your future goals and how we can help.

Contact Us