VOL. 128 | NO. 108 | Tuesday, June 04, 2013
Rays of Wisdom
Dana and Ray Brandon
Take It From 30 Years of Experience
By Ray and Dana Brandon
Ray’s Take I started my career as a professional financial planner 30 years ago this month. Just as I do with my clients every year, I think it is important to review what has happened, what has worked and what has not, in order to improve.
When I was developing my skills in the early 1980s for valuing assets and allocating resources, I recall that things were, like now, uncertain at best. We had endured a bruising decade of oil shocks, inflation, and disappointing investment returns in both stocks and bonds during the 1970s.
There was distrust in the federal government and the Federal Reserve and serious discussion that the capital markets might no longer be relevant to ordinary investors. The popular media promoted investing in gold as the only reasonable asset to hold in order to protect value, and gold had delivered fairly good returns for the previous decade.
I learned then that valuation is challenging, and it was best to perform independent research rather than relying on recent experience or the popular trends of the time. By way of perspective, the Dow Jones Industrial Average stood then at 963.99 (now around 15,200), the 30-year long bond yielded 10.6 percent (currently about 3.25 percent) and gold stood at $615.00 an ounce (currently around $1,380.00). You can do the math from there. I further honed my skills with both the Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA) degrees.
Financial planning provides a disciplined framework in order to prioritize and achieve goals. There has been no shortage of distractions, temptations and alluring shortcuts along the way. Some just didn’t work, like “portfolio Insurance.” Others were outright frauds like Madoff and Stanford. I used to wonder why these things kept occurring, but have realized they are what people want to believe, and few have gone broke telling people what they want to hear.
From my 30-year perspective, the one thing I am absolutely certain of is that The Plan is the thing. With a well-crafted, focused and regularly reviewed financial plan, decisions on investments, tax planning, risk management, and estate planning become much clearer. Without a plan it is so much easier to be blown off course, based upon short-term trends and well-crafted marketing strategies.
At the same time this work is very humbling, as I don’t delude myself about how much control we really have over our lives; it’s not as much as we often wish or believe. But that does not mean we shouldn’t try. Stewardship over our gifts and resources is important.
As proud as I am of my 30-year career, I note with interest that my father just celebrated his 60th anniversary as a professional financial planner in our firm, and he still comes into the office every day. At least I feel like I am halfway there!
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at firstname.lastname@example.org.