Are You Suffering From “Benchmark-itis”?
What is more important
to you – beating a benchmark or another money manager, or reaching your
personal financial goals? Please
read on to learn how adopting a “goals based” approach can help you avoid the
curse of “benchmark-itis.”
Numerous studies show that most so-called “active” money
managers – money managers who try and beat the market – rarely do so. When their actual performance is compared
against their “benchmark” (for example, the S&P 500), they come up short.
Despite this, money managers doggedly stick to a system that
measures success in terms of benchmarks, and inundate their clients with
benchmark statistics. Although they rarely win, most money managers keep trying
to beat someone.
This approach does not serve clients well. Investments are
just a tool – and only one of the available tools – to help clients reach their
financial goals. The real measure of
success should be whether or not the client actually reaches their goals. Put another way, the focus of success should
be on how the client did, not on how the money manager did.
Does your wealth management suffer from “benchmark-tiis”? Ask your self these questions:
·
Do you
have a written Balance Sheet and Cash Flow Statement?
·
Do you
have a concrete set of financial goals for the next 3, 5 and 10 years?
·
Have you
evaluated whether your goals are realistic --- in light of your resources and historical
rates of return?
·
Have you
done a detailed analysis of your current investments – to see if they are
properly positioned to meet your goals?
·
At least
once a year, do you re-visit your goals and your progress in meeting them?
·
Does your
financial advisor spend more time talking about products and performance or helping you meet your goals.
If you have answered YES to any of these questions, you
are at serious risk of not meeting your financial goals. There is a better way. By using a client-focused, “goals-based”
approach, you are much more likely to meet your goals, and you will sleep
better at night.
Are you worried about meeting your own financial goals?
Please contact me at pculver928@gmail.com
or 917.697.4156 to learn more.
© 2016 Peter F. Culver
