Financial Planning: It’s More than Math

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In the financial world there is so much to know. As CFP® Professionals we have dedicated ourselves to obtaining knowledge of investments, taxes, estate planning, insurance, and the like. At Whelan Financial, we strive to gain a deep understanding of each client to create a custom financial plan that will guide them in making sound financial decisions. It’s important to note the time and attention each client is given; we are not just a transactional business but a relational one. 

The service we offer goes beyond the technical knowledge that is required of us and reaches into the feelings, thoughts, and fears that our clients have. We remember that we help people reach their financial goals. 

This human element makes our job so much more exciting, so much more meaningful. We know that when the market is up, investors are often very happy – why wouldn’t they be? Conversely, when the market is down, investors are often concerned about their outlook.  

We understand that fluctuations in the stock market can cause uncertainty and stress, and we make considerable efforts to proactively reduce this stress in a caring, yet practical way. Here are a few of our methods.

Teaching You How to Approach the Stock Market

Client education is a key component of our practice. We know that historically the stock market rises over long periods of time. But it’s short-term market volatility that is often the cause for alarm. This is why we have quarterly meetings. We want to keep clients up to date with the progress of their financial plan, whether they’re on track, or whether a change needs to be made.

We teach our clients to have realistic expectations of the market and show the importance of “sticking to the plan” for the best long-term growth potential. The truth is there will always be market volatility, and there will always be news cycles and economic theories bombarding us, creating doubt and stress. This can be harmful. 

We aim to correct client perceptions when something unfavorable happens not just with facts and historical charts but by acknowledging the concern and providing a real way for clients to deal with the noise they hear. And most powerfully, connecting them to the progress of their financial plan. 

Managing Fear While Investing

Commonly, there are two sentiments that are used to describe investors, “fearful” and “greedy”. When the market is down, “fearful” investors are inclined to sell their investments and hold on to cash. When the market is up, “greedy” investors are inclined to buy more in hopes they will benefit from the upward momentum. If an investor follows this trend, fearfully selling at a market drop and buying when the market is increasing in value, their portfolio will eventually see very poor performance. Buy low, sell high – this is the cornerstone of investing, yet so many individual investors don’t manage to do this on a consistent basis. In fact, the average investor often performs poorly compared to the broader market, especially during times of expansion. Investors who succumb to these sentiments often “get to the party too late” and miss out on high market returns or low buying opportunities.  

Our investment strategy is simple. Buy and hold low-cost, high quality mutual funds and ETFs. We don’t try to predict when changes in the market will occur, as this can lead to very costly mistakes and losses. We take a disciplined approach that is designed to withstand major shifts in the market. In other words, we don’t retreat when there’s a downward trend, nor are we overly optimistic when there’s an upward trend. We hold steady. 

Improving Your Financial Health

Oddly enough, these financial concepts are all very simple. To draw a comparison, it is also simple to live a healthy lifestyle. Eating healthy foods, drinking plenty of water, not smoking, working out, and getting enough sleep are all good healthy habits to get into. However, we spend loads of money on personal trainer sessions, diet plans, motivational books, sleep aids, and the list goes on because, in practice, these things are quite difficult. Why can’t we bring ourselves to do the simple things we know are good for us? In essence, just as our doctors keep our health on track, we Financial Planners keep you safe by helping you not succumb to financial pitfalls along your journey. In addition to maintaining dedication to our craft, our objective is to keep you on track, focused, and disciplined, help you make better choices, set realistic expectations, and even act as a coach through times of uncertainty and market volatility.

Authored by Michael Manjarrez, CFP®

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