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The year 2023 will be remembered as a great one for the US equity markets; the fear of inflation seemed to evaporate as we headed into the holiday season, a surprise to everyone. I’ve gotten calls lately from a lot of professionals in the fishing business asking, “Is it too late to get in the market, and if not, how do I get started?” Let’s take a look at the first question: Is it too late? I believe there are still several great opportunities available. Is the market overvalued? That’s a tough question to answer, and it depends on who is asking the question. Are you a captain who has a 30-year horizon or a 5-year horizon? It also depends on your liquidity and the amount of risk you are willing to take. I’ll share with you what I tell my clients about markets. First of all, you will never be able to time the market. Ever. If you could, there would be no need for me or any other adviser because you would have more than enough money to last for many generations. What I do like to explain to my clients is a little history of the markets. There have been numerous events that have driven the markets lower. My point is, we never know what could happen tomorrow. But if we have a solid plan and are long-term investors, the market has always rebounded to newer highs. I’m not saying there isn’t pain along the way or days when we feel this is the end of our economy, but the US is very resilient when it comes to capitalism.
Where Do I Begin?
Fortunately for new investors, there are many institutions that offer investment solutions or advice. My opinion is probably different from most. I still believe banks should provide banking services, insurance companies should provide risk mitigation, CPAs should provide tax advisory services, and investment professionals should build and implement portfolios. Unfortunately, in today’s environment, everyone wants to provide all these services so they can cross-sell a variety of products and services. The first piece of advice I would give someone is to ask a friend or family member if they have an adviser and see what they have to offer. Ask about their experiences, and what they like and don’t like about them, just as you would for a boat detailer or other service provider. A referral is always the best way to find someone. If that’s not an option, do some research and Google investment companies in your area. Look at their ratings and what they provide. I would schedule an appointment and conduct an interview to see what they are all about. Ask tough as well as personal questions—whatever makes you feel good about working with that person. I once had a CEO of a large corporation ask me to take the Myers-Briggs personality test to make sure we were compatible to work together. We ended up becoming good friends. Another option, which I also like, is to use a large custodian such as Charles Schwab or Fidelity. They have excellent resources and are accustomed to working with investors who are just getting started.
Start Today
It’s been said that the best time to plant a tree is 20 years ago, but that the second-best time is today. So these are the steps I would take as a captain, mate, boat broker or other marine industry professional. Do some research and find an adviser that you are comfortable working with. Make sure it’s a reputable firm and that they offer the services you need. Spend some time and make a plan in terms of how much money you want to put away. You can also work backward and try to determine how much money you need for a goal such as retirement. Start deploying the funds as you and your adviser see fit. Do not worry about what happens in the market today, tomorrow or even six months from now.
A few thoughts to keep in mind, though: the market will not make you rich. It will allow you the opportunity to grow your money at a reasonable rate over a long period of time. The biggest headwinds in accumulating wealth are fees and taxes. Please make sure you are aware of these before making any plans. I see it all the time; the fees that people pay can be huge. Also, fees can be visible and above the line, but many are embedded and below the line. It’s important to have full transparency.
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This material is for informational purposes only. Statements of future expectations, estimates, projections and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative, as they are based on assumptions that may involve known and unknown risks and uncertainties. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. There is no guarantee that the selection of a specific custodian is representative of the experiences of other clients, and there is no guarantee of future performance or success by selecting that custodian. Please consult legal or tax professionals for specific information regarding your individual situation. Sowell Management does not guarantee performance for any investment recommendation. Investors should consider investment objectives, risks, charges and expenses before investing.
