“I don’t think many people know that More than Money works with young people as well as baby boomers. My son is 29 and has been a client of your company’s for almost 5 years. He showed me the return he got on his account last year and it was tremendous. To tell you the truth, I was a little jealous.
I just thought more young people should take advantage of your services.”
Thank you. You are very kind.
Our More than Money advisors are very pleased at the number of younger folks (some in their teens) we are privileged to serve. To complete the picture, we have clients in the teens and in their nineties and everywhere in between. The rumors that all young people are financially clueless, feel entitled, and have no ambition are simply poppycock (how’s that for an up-to-date, ‘hip’ thing to say?!). Tons of the clients we serve in their teens, twenties, and thirties are brilliant, hardworking, and have important goals for themselves and their families.
Now that we have the pleasantries well handled, let’s turn to two very important points. First, while your view of your son’s returns are ‘tremendous’ – everything in life is relative. One man’s tremendous is another man’s disappointing. A tremendous return for a young man of twenty-nine (29) would likely be way too much risk exposure (nearly 100% in the stock market) for a man of fifty-nine (59) who’s goals might require keeping half or more of his assets out of the stock market.
Second, you have heard ‘past performance does not guarantee future performance’. Duh. If this is not your first rodeo you know that what an investment has done provides no guarantee of what an investment will do. However . . . this guidance actually means something a bit more important in the case of the lad and his dad.
Dad’s envy of son’s success will likely fade when, at some point in the future (virtually guaranteed!) his son’s portfolio endures a significant (and perhaps protracted) drop in value. Son’s near total commitment to the stock market carries with it the absolute assurance that he will feel the full wrath of a stock market downturn when it comes. If an investment can rise 30% (‘tremendous’) it can also drop 30% or more (intolerable to Dad!).
Son has thirty (30) or more years to ride the roller coaster with (appropriately) little or no concern for the wild swings he will experience during that time. Dad has (maybe) six years to retirement and must have considerable concern about – not how high is high, but how low is low?
Investing in the stock market? In a very real sense past performance does for-tell the future. In the past the stock market has taken investors on a dramatic roller-coaster ride of ups and downs. We have no reason to suspect the future won’t bring the same ‘excitement’.
If you have questions or comments, please send them to [email protected]