Broker Check

Travelling Along Life’s Path

January 04, 2018

Happy 2018!

Each and every day we are greeted with news. Whether that great algorithm has arranged what you are going to read on the internet or you have selected a specific channel / news outlet to follow, the world changes around us, whether we read about it or not.

I want to talk about the difference between planning and advice. In general, Harvest Financial is here to provide advice. Planning is one tool we use to provide advice.  Each year, around this time people often set resolutions for the New Year.  This is planning.  Some plans are met, some missed and some forgotten. 

How are plans ‘missed’? Perhaps they are ill advised to begin with, perhaps you don’t have the real passion to see the goal through or perhaps life gets in the way.

Fires devastated many lives here in Napa and Sonoma, disrupting many plans.

As a follow up to our donation to Lighthouse for the Blind. I received a call from Paul Blaney thanking us for the donation, of course, but also talking about Volunteer Opportunities to get the camp ready for summer.  The first thing that is going on is SAFETY. Since Enchanted Hills is a Youth Camp, there are regulations regarding the burned trees around the camp.  The silver lining is they will be able to mill some of the trees to create lumber for various projects.  Their plan has changed, but with the advice of experts, they will continue to progress.

A plan is a wonderful path to follow. You will be more certain to achieve your goal with a plan than without a plan.  But having a plan does not guarantee success.

Advice from qualified experts, on the other hand, is invaluable for the bumps in the road. When Nani and I are travelling to a spot we are unsure of, we use Waze. The App provides a ‘plan’ from home to destination.  Another great feature is the ‘advice’ available as you travel; traffic Jams, accidents, police activity or suggestions of where to stop if you get hungry or need to buy something.  All available with a touch of the buttons.

I love questions about ‘the market’. In 2017 the S&P 500 was up 21.83% and the Bloomberg Barclay Aggregate Bond Index was up 3.54%. Which ‘market’ were you invested in?  To put asset allocation into a travel analogy; when driving in the Bay Area, one of the 80 Freeways is going to be fastest but not as pretty as Highway 1. Just as you may want to add some vistas to your travel, you may choose to take some risk off the table by adding bonds to your portfolio and not have all your eggs in one basket.  Once you add bonds, your portfolio will perform differently than a portfolio with 100% stocks like the S&P 500.

I love questions about insurance. ‘That doesn’t seem like a good investment.’  You’re right, it’s not.  Insurance is all about risk management.  You have health insurance in case you get sick.  You have life, income protection, or long term care, ‘in case’ something happens.  We create plans based on assumptions for risk management for our clients.  Then we re-evaluate if the tool is working or if the protection is right at this point in time.

Certainly 2018 will bring many opportunities and changes. If you find yourself needing advice, give us a call, and using our tools, planning, investments, insurance or even our network of other experts, we will go to work.

All the best!