HB Clients Featured in National Media

It was another good week for those of you taking advantage of our Just in Time media relations services. Here are some highlights.

ANTHONY GLOMSKI, founder of AG Asset Advisory, was the featured guest on the Angel Investor Podcast with Jeff Barnes. Author of the new book, Liquidity and You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit, Anthony discussed the importance of surrounding yourself with the right people to build your business on secure footing to produce a successful exit. Again, you can check out the episode here.

BLAKE CHRISTIAN, CPA, told US News & World Report that proper diversification not only applies to asset classes, but to working with more than one financial advisor if you have over $1 million in investable assets (see Should Investors Diversify Providers?)  "Each advisor has different style, expertise and biases," explained Christian, a partner at Holthouse Carlin & Van Trigt, in Long Beach, California. Christian is the author of a new book we’re finalizing called Benefits of Becoming A CPA-Preneur.

KYLE WALTERS, a wealth advisor at L&H CPAs and Advisors in Dallas, TX, had another guest column published in Accounting Today entitled Red Teaming: Creating your perfect competitor makes you a better, more focused firm. Author of the new book, The Personal CFO, Walters said red teaming requires you to build of model of your perfect enemy/competitor before someone else does it for real.

Great work gentlemen. As our annual Wealth Advisor Confidence Survey™ revealed, more than half of advisors expecting double-digit growth this year (54%), say press mentions are a “very” or “extremely important” component of their personal branding initiatives. That’s significantly higher than advisors who are expecting single-digit or flat growth over the next 12 months.

Where would you rather be?

TAGS: Anthony Glomski, AG Asset Advisory, Blake Christian, HCVT, Kyle Walters, L&H CPAs, Accounting Today, Angel Investors Network Podcast, Jeff Barnes

Getting Quoted in The Journal Is Not Impossible, But……

Research shows that getting mentioned in the press is one of the most effective ways for financial advisors to enhance their personal brands and to become bona fide thought leaders. But, the competition for journalists' attention is fierce. Not only are PR folks pitching them constantly, but so are financial professionals themselves and/or their agencies. 

The media industry has changed dramatically over the past few years. The number of journalists has shrunk, but the number of stories editors expect to be filed has increased as so much content has moved to the Web. 

According to Rich Chernela, a veteran financial media relations professional who has recently joined our firm, “Journalists are expected to update stories repeatedly and there are fewer and fewer in-depth stories. A number of reporters I know have complained to me that they are limited to 500 word stories. This leaves very little room for anything but top line info and very little, if any, analysis.”

So, how do I get coverage (that counts)?

Chernela says the old fashioned PR approach of introducing sources to journalists for future commentary remains a key element of any PR program. That said, the tried and true approach has become more difficult in light of the factors mentioned above. “This leaves journalists little time to break away for background meetings or phone calls—let alone lunch.”

TIP: Whether you’re doing your media outreach by yourself or with an agency, make sure you are VERY FAMILIAR with the topics and industries the journalist covers and show some evidence that you’ve read a few of their recent articles. It’s an instant red flag when a journalist receives a pitch that’s way out of his or her target area and you might not get a second chance to get on their radar.


Make a journalist’s life easier

A creative PR person can get the attention of a journalist with a clever story idea that identifies a trend or issue that is being overlooked.  A good PR person should be monitoring breaking news and quickly identifying journalists whose beats are relevant to the breaking news and contract them to offer a client for comment. 

“To break through the noise, a PR person must know the client's take on the topic,” added Chernela.  “Journalists don't want to hear about someone who can comment on a hot topic or issue--they want a source who is not just credentialed, but who has an authoritative and unique take on the issue.”

Speaking of media attention

• Our client Anthony Glomski, founder of AG Asset Advisory was quoted in Forbes this week Why Many Entrepreneurs Are Missing Opportunities To Maximize Their Wealth. 
• Meanwhile, Kyle Walters, (L&H CPAs) has been a twice-monthly guest columnist in Accounting Today and was just named to Accounting Today’s Top People to Watch list for 2018.
• Matt Topley (Fortis Wealth) was featured in Advisor News (So, Your Client’s Child Is An Elite Athlete – How Do You Plan Financially For That?) ….and his colleague, Randy Hubschmidt, was recently quoted in US News & World Report (Take a Crash Course in Student Housing Investments).
• James Nevers (Soundmark Wealth) recently shared his thoughts about planned giving in the Self Magazine financial planning guide (What Financial Planners Want You to Know Before You Donate to Charity).
  Conclusion

We can’t guarantee you’ll see results like those of our clients above. But if you do your homework and follow our plan, you’ll be more than ready when the right media opportunities come knocking.

TAGS: Rich Chernela, Kyle Walters, Anthony Glomski, Matt Topley, Randy Hubschmidt, James Nevers, 

HB Clients Featured in Philly Inquirer, Advisor News and Accounting Today

From stock market forecasts, to the dollar’s impact on emerging markets, to getting your firm to the next level of growth, HB clients educated the national financial media last week.

With respect to the dollar’s impact on emerging markets, our client Matt Topley (@MattTopley), chief investment officer of Valley Forge, PA-based Fortis Wealth told the Philadelphia Inquirer that the greenback’s strength has hurt emerging markets where the majority of debt is dollar-denominated. As a result, emerging market stock markets sold off and are extremely cheap, explained Topley. “One fund we use for clients and which is my biggest position personally is DFA Emerging Market Value” (symbol: DFEVX), The fund trades at below book value, which is a buying opportunity,” Topley added.  The key takeaway is that if you think the president and other factors will push down the dollar, then this may be a point in time to start buying emerging markets.

Meanwhile, HB clients Bill Schultheis and James Nevers (Soundmark Wealth Management) told Advisor News last week that “There is nothing on the horizon that leads us to believe a bear market is imminent.” Soundmark’s forecast calls for muted economic global growth on the horizon as they explained in an Advisor News piece entitled Are Investors Losing Faith In The Stock Market?

Kirkland, Washington-based Soundmark expects common stocks to return somewhere in the 5 percent-to-7 percent range. “We have incorporated these conservative estimates into our clients' projections,” they added.

Meanwhile, our client Kyle Walters (@AtlasCFO), a partner at Dallas-based L&H CPAs and Advisors just published his latest guest column in Accounting Today (Are you committed to being a better firm or just interested?).

This is the time of year that CPA firms like to have their offsite retreats in which great ideas are bandied about, but rarely implemented upon returning to the office. To break through this inertia, Walters wrote that you have to set a realistic timeline for implementing change. “Start with a bite-size chunk that you can commit to implementing in the next 90 days—a change that will have a big impact on your firm and the value you’re delivering to clients. Call those your ‘90-day rocks.’ Don’t do five things—just do one.’”

Conclusion

Whether investing or overseeing a professional service firm, the winners today are those that set realistic expectations and always follow through on what they promise. That’s what our highest performing clients have figured out—and the media is taking notice. As Warren Buffet famously said, “Price is what you pay. Value is what you get.”

TAGS:  Soundmark Wealth, James Nevers, Bill Schultheis, Advisor News, Kyle Walters, Accounting Today, L&H CPAs, Warren Buffet

DOL Fiduciary Rule Overturned (Again)

Are you surprised?

As most of you know by now, a federal appeals court vacated the fiduciary rule late last week. On the surface, the decision was a setback for consumers, investors and their advocates and it was a win the broker/dealers, insurers and others in the financial product sales arena who’ve been increasingly under pressure to recommend investments that benefit their clients before themselves.

“It’s definitely a step backward, especially since the rest of the world is moving toward the fiduciary standard,” said our client, Kyle Walters, a partner of L&H CPAs in Dallas. “It’s like the Paris Climate Agreement in which the U.S. was the only major country in the developed world not to sign on.”

Another of HB client, Blake Christian, CPA, said the overturning of the Fiduciary Rule is a concern for larger investors who have significant dollars under management. “There are many games being played with respect to bond pricing, fund fee structures, annuities, Master Limited Partnerships and other investments,” observed Christian, a partner at Long Beach California-based HCVT. “There are a select number of investment advisors who already adopted the Fiduciary Rule before the old rule (now overturned) became mandatory.  These firms will likely leave their voluntary rules in place.”

Since the Fiduciary Rule provides investors with assurance that the investment advisor will be acting on the customer's behalf rather than on behalf of their firm, “there is less likelihood of self-dealing, conflicts and being directed to high-fee investments,” added Christian.

Michael Kitces, CFP, author of the popular Nerd’s Eye View blog, concluded that ultimately, “it’s not about the ‘right’ standard — suitability versus fiduciary — to apply across financial advisors and the brokerage industry. It’s about recognizing that brokers and annuity agents fulfill a sales role that is functionally different than actual advisors.” Job titles and disclosures should accurately reflect the nature of those relationships, Kitces added.

Once the distinction between advice and sales is truly clear, let consumers make their choice, Kitces argued, adding that there are times when the public just wants to talk to a salesperson to help them effect a sales transaction. “After all, when I walk into a clothing store in the mall, I’m not looking for a personal fashion consultant; sometimes I just want a salesperson to help me complete the process of buying what I want, and giving me the relevant product information I need to make the decision,” quipped Kitces.

“As I mentioned earlier, this ruling is definitely a step backward at a time when the industry needs to be moving toward being an advice industry,” noted Walters. “That’s where everything is going one way or the other. I’m not sure how big the impact will be since clients are becoming better educated. Whether [the fiduciary standard] is required or not, clients are asking the right questions of their advisors. If you’re an advisor of any kind, that’s not something you can hide from,” warned Walters.

HB client Pat Runyen, of Valley Forge, Pennsylvania-based Independence Advisors, said it will be hard to determine what will happen long-term if the fiduciary standard dies for good. “Many large brokerage firms already have begun to roll out changes to comply with the rules, and plan to keep some or all of these changes regardless of what happens. My best guess is if the rules go away, the affected firms will likely go back to operating under the ‘suitability’ standard given the lucrative incentives.”

Runyen believes this will ultimately be a “net positive” for individual investors over the long-term given the awareness it has raised. “Since last year, many new clients I’ve met with will ask if I’m held to a fiduciary standard (yes). Before that, no one asked such a question. Many CPAs have told me they’ve been asked the same question,” added Runyen.

Walters agreed with Runyen. “As clients get better educated, they can make the fiduciary standard a priority when choosing who to work with. It doesn’t matter from a legality standpoint. They’re going to vote with their feet.”

According to Christian, those who are acting in a trustee or administrator role will be wise to deal with investment firms that continue to operate under the Fiduciary Rule provisions.  “This will offer the trustee/ administrator added protection if a contingent beneficiary or other interested party brings an action against trustee/ administrator,” added Christian. 

Conclusion

Our Take—as always, the best educated consumers—and the most ethical advisors—will find each other eventually and they’ll win in the end.

TAGS, Kyle Walters, Michael Kitces, Pat Runyen, Blake Christian, L&H CPAs, Nerd’s Eye View, Independence Advisors, HCVT

*** Take our Insta-Poll and see how you stack up to your peers.

HB Clients Attracting National Media Attention

Burning the midnight oil may seem lonely at times, but your efforts did not go unnoticed by your clients or the national media. Those of you who’ve been making your weekly Gut Check™ accountability calls are 5-times more likely to obtain coverage and guest publishing opportunities.

Here’s a sampler:

BLAKE CHRISTIAN, CPA explained to Financial Advisor Magazine readers how the potential elimination of the AMT Slams HNW Clients on Real Estate. “Repeal of the alternative minimum tax could have a significant impact on investment plans,” said Christian. “Under current law, alt min’s top rate is 28 percent. Its elimination would drive many AMT clients into the 35 percent bracket and push them to invest in tax-free municipal bonds,” added Christian, a partner at HCVT LLP in Park City, Utah. Christian recently unpacked the Trump Tax proposal on the Mountain Money podcast and keys to opening a new office on the Journal of Accountancy podcast.  Blake was recently interviewed on Sarder-TV about his new book, “Becoming a CPA-Preneur, Never Again Be the Most Boring Person in the Room.”

KYLE WALTERS, a partner of Dallas-based L&H CPAs & Advisors landed regular guest columns in Accounting Today (The Power of the Red Chair) and CPA Trendlines (How to Avoid Getting Run Over or Left Behind). Hint: Staying in your lane will not get it done in today’s complex advisory service super highway.

SAMUEL BETHEA, The Rosewood Group’s president, was among the cybersecurity experts profiled in Digital Guardian. "When it comes to security measures in a small business, the metrics generally fall into two categories: internal protection and external credibility,” explained Bethea.

MATTHEW TOPLEY, Chief Investment Officer of Fortis Wealth in Valley Forge, PA told The Street why Millennials Are Scared and This Is the Financial Reason Why. He was recently published in Planned Giving Design Center (Top 10 Life Advice Comments for Millennials). Hint: Get off Facebook and learn how to write, speak and network in the real world, advocates Topley.

ANTHONY GLOMSKI, founder of Los Angeles, based AG Asset Advisory  is frequently asked to comment about cutting-edge issues at the intersection of finance and technology. Take Bitcoin and blockchain technology. Glomski told US News & World Report that "Blockchain appears to have the potential to be as transformative as the internet.” However, he cautioned that at this stage you’re talking about “speculation rather than an investment. This phenomenon is as old as the tulip bulb bubble of 1634.” Glomski was also interviewed on Sarder-TV about his new book, Liquidity & You: A Personal Guide for Tech and Business Entrepreneurs Approaching an Exit.
 
Also check out other provocative new books by our clients:

• International Tax & Compliance Handbook (with special emphasis on India-US)
  By Cecil Nazareth, CPA, CA, MBA
  
  
• The Benefits of Becoming a CPA-Preneur: Break the mold; never be the most boring person in the room
  By Blake Christian, CPA/MBT

Conclusion

According to the Wealth Advisor Confidence Survey™ 2017 that we conducted with The Financial Awareness Foundation, half of advisors (48%) say that being quoted in the press is a “Very” or “Extremely” effective way to enhance thought leadership. Nearly two thirds of respondents (63%) say the same about writing articles for publication. Respondents were 5-times more likely to cite these channels than to cite mainstream social media (other than LinkedIn).

Are you sure you don’t have time to publish, speak and grant interviews in 2018?

*** Are you a Finder, Minder or Grinder? Take our Insta-Poll and see how you stack up to your peers.

TAGS: Blake Christian, Anthony Glomski, Kyle Walters, Samuel Bethea, Cecil Nazareth

HB Clients in the News…Yes, Media Coverage Matters

Boast all you want on your website and social media accounts. But, it’s hard to beat the value of being quoted in the press or writing guest columns for influential media outlets.

According to the Wealth Advisor Confidence Survey™ 2017 that we’re conducting with The Financial Awareness Foundation, half of advisors (48%) say that being quoted in the press is a “Very” or “Extremely” effective way to enhance thought leadership. Nearly two thirds of respondents (63%) say the same about writing articles for publication. Respondents were 5-times more likely to cite these channels than to cite mainstream social media (other than LinkedIn).

CHANNEL	% Advisors say “Very” or “Extremely” Effective
Being quoted in the press	***********************************48%
Writing articles for publication	****************************************63%
Facebook, Twitter, Instagram	**** 9%

Source: HB Publishing & Marketing CO, LLC and The Financial Awareness Foundation,2017

Fortunately, many of our clients get it, and we’re happy to guide you through the process. Just don’t contact us if you’re looking for shortcuts, a magic formula or instant cover stories in Forbes or The Wall Street Journal.

Kyle Walters, a partner of Dallas-based L&H CPAs & Advisors explained in his recent Accounting Today article (The Power of the Red Chair), that financial advisory firms should pretend that A-list clients are in the room with them at all times. Imagine that your best clients are sitting in a special red chair in your conference room, he wrote, when you make strategic decisions about service offerings, billing models or CRM.

“It doesn’t matter what we think,” added Walters. “The only thing that matters is what our clients think. What can we implement that will make their lives easier and make them happier with the experience we provide?”

Blake Christian, CPA was quoted in Financial Advisor Magazine this week about the impact of a potential elimination of the AMT (Tax Reform Slams HNW Clients On Real Estate).  “Repeal of the alternative minimum tax could have a significant impact on investment plans,” said Christian. “Under current law, alt min’s top rate is 28 percent. Its elimination would drive many AMT clients into the 35 percent bracket and push them to invest in tax-free municipal bonds,” added Christian, a partner at HCVT LLP in Park City, Utah. Christian recently unpacked the Trump Tax proposal on the Mountain Money podcast and keys to opening a new office on the Journal of Accountancy podcast.  

Anthony Glomski, founder of LA-based AG Asset Advisory is a frequent source for US News who will be a featured guest on Venture App later this month. Glomski said he’s frequently asked to comment about cutting-edge issues at the intersection of finance and technology. Take Bitcoin, for instance.

“Some smart people are saying that Bitcoin is a fraud and others say it’s the new definition of money,” said Glomski.  “Time will tell, and holders of Bitcoin will either make a lot…or lose a lot.  What I know for certain is that no one knows for certain. Block chain has been called internet 3.0,” added Glomski.  “Just like 1.0 and 2.0—even if many of the fundamental predictions prove correct—this will be a volatile place to both make and lose a lot of money.”  

Conclusion
Media coverage doesn’t just build credibility; it enhances your refer-ability. In today’s electronic age, links to those clips are a snap for satisfied clients and influencers to forward along to prospective clients. Every channel counts, but as we posted last month, Don’t Be Cheap or Lazy with Client Communications.

So which would you rather have: Likes and Retweets or actual new clients?

Most Advisors Not Spooked Yet. Are They Delusional?

Suppose you stood outside your local DMV and took a random poll of motorists. The vast majority would tell you they are very good drivers. And guess what? Those same folks would tell you most other motorists on the road are terrible drivers. It seems like the same thing is happening to independent financial advisory firms.

According to our Wealth Advisor Confidence Survey™ 2017, five times as many advisors expect their own firms to grow by double-digits next year than they expect peer firms to grow by double digits (49% vs. 9%).

	Advisors expecting to grow by double-digits
Our firm	***********************************49%
Peer firms	**********9%

Source: HB Publishing & Marketing CO, LLC and The Financial Awareness Foundation,2017

Despite concerns about Washington, the Trump tax plan, robo-advisors, artificial intelligence, a looming market correction and generational shifts, most high-end independent advisors remain optimistic. Is that rosy outlook justified?

A number of our clients weighed in on the subject—hard.

Matt Topley, CIO of Fortis Wealth in Valley Forge, PA said that our egos too often get in the way. “For starters, Wall Street recruits from what it believes are the best of the best young minds, coming from the most prestigious schools,” explained Topley. “Many were scholar-athletes or heads of numerous student groups and organizations. Many more had military backgrounds or other notable leadership experience.  These lifetime over-achievers have stellar resumes and type-A personalities, but that’s also what causes them to develop massive human biases within their psyches. Most don’t realize it.”

How so? All these factors lead to “the illusion of skill,” added Topley. “The more knowledge we possess, the more that overconfidence bias engulfs us. And that’s very dangerous, because a series of human biases are especially damaging to employees in the finance business.”

A partner in a Top-50 CPA firm told me the other day about his big initiative to encourage firms to be more proactive. They need to get their business plans ready for “big technology shifts and other changes that can wipe out your current market advantages.” He said “CPA firms are sitting ducks along with many other sectors,” adding that “Robo/AI risks are a bit overblown and we will actually see a hybrid AI/ Human solution that gives the best of both worlds.  Wealthy people and most others crave human interaction with their professional service providers.”

Kyle Walters, founder of Dallas-based Atlas Tax Advisors, agreed. As he explained in his recent Accounting Today article (The Power of the Red Chair), financial advisory firms should pretend that A-list clients are in the room with them at all times—i.e. sitting in a special red chair--when they make strategic decisions about service offerings, billing models or CRM.

“It doesn’t matter what we think,” added Walters. “The only thing that matters is what our clients think. What can we implement that will make their lives easier and make them happier with the experience we provide?”

Anthony Glomski, founder of AG Asset Advisory in Los Angeles, told me that financial advisors of all stripes are not setting the bar high enough. “As Peter Diamandis would say: ‘In a world where everyone is competing furiously for 10-percent improvements, you need to be thinking about how to get 10X.’” Glomski added that the pace of change “seems too great today for that to be sufficient, let alone disruptive. Historically, I suspect a lot of “aha” moments got you just 10-percent.” 

According to Topley, the reason active managers fail to beat their benchmarks over the long-run is due more to psychological reasons than it is to intellectual failures. “There is non-stop pressure on portfolio managers to DO SOMETHING  for outperformance--i.e. trade around positions, add to winners, find out of the mainstream stocks or sell winners. Ironically, doing nothing is sometimes the best answer,” added Topley. “When we overload our brains with decisions, our human biases come into play.” 

And then there are things beyond our control such as the increase of fraud and cyber-attacks. Encryption and security badges serve two very important purposes, explained Samuel Bethea, founder of The Rosewood Group in Rock Springs, WY. “Incorporating these two features into your overall system of security will provide assurances to your customers that you have (a) taken precautions to protect their information and (b) will convey a sense of digital sophistication and understanding of the threats that loom on the internet today.”

Cyber security ensures that all sources of digital penetration from an external source have been mitigated in your system, added Bethea. “In a small business, it might be wise to partner with cloud resources that have cyber security built in to their security systems.” 

We live in a highly competitive, information-rich world, said Glomski. “Any AHA moment must be backed by fast and fierce persistence. Many AHA moments are followed by others who say ‘uhhh yeah’ which means I’m doing that too.  AHA can give you a 100-yard lead in a race. Take your foot off the accelerator for just a few seconds, and you can easily be passed.”

Conclusion

Let’s stay in our lanes during the final stretch of 2017 no matter how fast you like to go. You may be a good driver, but without two hands on the wheel at all times, you’re not much better than all the other maniacs on the advisory highway.

As Walters observed: “People don’t leave their [financial advisors] because they charge too much. They leave because they don’t feel valued and appreciated—and because they don’t feel listened to.” 

TAGS: Kyle Walters, Matt Topley, Samuel Bethea, Anthony Glomski, Wealth Advisor Confidence Survey 2017

Clients Don’t Care How Many Hours You Work

If ever there was a day to avoid feeling guilty about taking a weekday off from work it would have been yesterday—Labor Day in the U.S.

While most people associate this 3-day weekend with beaches, barbecues and retail shopping sprees, Labor Day evolved in the late 19^th century following decades of tensions between workers and unions on one side, and state security forces and employers on the other.

Workers in New York City celebrated the first Labor Day on September 5, 1882 with a parade organized by trade unions. Oregon was actually the first state to recognize Labor Day as a holiday in 1887. By the mid-1890s, more than 30 states recognized the first Monday in September as a holiday. In 1894 Congress voted unanimously to approve Labor Day as a full national holiday, and President Grover Cleveland signed it into law.

Ironically, what began as a Holiday to support progress in worker’s rights has become an excuse for many to overeat, overdrink, over-tan and over-shop. Just as disturbing, it has become a “free” catchup day at the office for way too many Type-A professionals.

Long hours don’t = hard work (or success)

The cleaning crew knows me pretty well at my office. Neighbors often see the lights on late at night in my home office. Everyone assumes I’m burning the midnight oil, but what they don’t know is that I typically take a 90-100 minute lunch break to exercise and/or run family errands. I often don’t start producing revenue producing work until 10am. I frequently leave the office well before 5pm on weekdays to coach youth sports, to catch my kids’ school events or to honor other family commitments.

So when people ask me how much I work, I usually say “about 16 to 18 times a week.” What that means is a solid morning session every weekday (5x), plus a reasonably hard afternoon session every weekday (5x more), plus a little catch up most weeknights (let’s call that 4x) and then two or three short sessions on the weekend (generally Sunday) to tie up on loose ends and to set the table for the week ahead.

And what about all those times when a solution for a tough client problem pops into my head while riding, swimming or running—a solution that never would have occurred to me at my desk? How do you put that kind of value-building for your client into an hourly billing system?

Our client Kyle Walters (Atlas Wealth Advisors) recently wrote that hourly billing encourages professionals to be inefficient. CPAs, attorneys, consultants—professions long based on billable hours—“are governed by a system that tells workers it doesn’t matter how well you are doing; it only matters how much time you spend doing it,” added Walters. He also pointed out that these are “effort-based” business models, not results-based models. “Why would firms promote and encourage ingenuity when they can create systems and processes that cuts the amount of time it takes to get the client the kind of results they’re paying for?” asked Walters. 

In a New York Times interview Sunday, Jason Fried, CEO of the collaborative work tool company, Basecamp said that unlike most early stage tech companies, “we’re opposed to the prevailing idea in our industry that you have to work 60, 70, 80 hours a week to do a good job. We believe 40 is enough,” adding the 32 is sufficient in the summer months.

In 2010, Fried and his business partner, David Hansson published Rework, a book that systematically debunked workaholism and the “get-rich-young or die trying” culture of Silicon Valley. Fried and Hannson have a new book coming out this year called The Calm Company.

In the heart of Silicon Valley, Stanford University economist, John Pencavel, published a 2014 study that showed working more than 56 hours a week adds very little additional productivity. But too many insecure and/or highly driven workers feel that extra hours, whether at home or in a cubicle, demonstrates commitment and team spirit. Guess what? Your clients don’t care and your boss doesn’t care.

*** How often are you communicating with your clients? Chances are it’s not enough. Take our Insta-Poll and find out how you stack up to your peers

There are countless books published every year about time management and working less hard for more money. We haven’t joined the ranks of self-help gurus, but we’ve found two very simple techniques to be helpful for our team and our clients: The 25/5 method and the 5-4-1 method.

The Pomodoro 25/5 technique is based on repeated intervals of 25 minutes of hard thinking/working followed by consistent 5-minute breaks. Our own 5-4-1 technique is based on 5 hours of uninterrupted working/thinking time in the morning, followed by a 1-hour plus lunch break. Then you come back re-energized so you can work hard for 4 hours in the afternoon, followed by a reasonable dinner break for family time or personal time. Then you finish up with one hour of regroup time to review the promises, commitments and to-dos of the day and get set up for tomorrow.

Conclusion
It’s the number of hours you put in, but what you put into those hours. That’s how you create value for your clients, your customers and your stakeholders.

VCRGD6XDXT3T


TAGS: Kyle Walters, Pomodoro technique, Jason Fried, David Hansson, John Pencavel, workaholics, ReWork, The Calm Company

Markets Too Calm? Time to Fix the VIX

As many of you know, The Chicago Board Option Exchange’s Volatility Index (better known as the VIX) is at a record low level. Long the market’s gold standard for measuring investor fear and paranoia, the VIX has been hibernating all year. This week the VIX fell below 10, its lowest closing level since December 1993 and its longest sustained stretch of calmness in 27 years. Did someone at the CBOE accidentally unplug the VIX or are we really entering an extended period of calm seas?

Most analysts and pundits expected that the inauguration of President Trump, the political neophyte and tempermental tweeter, would trigger significant volatility in the markets. Yet U.S. markets remain at or near their all-time highs. Despite the revolving door or hirings and firings in Trump’s inner circle, the markets have generally ignored Washington’s real-life reality show, North Korea nukes and a huge amount of uncertainty around global trade, tax reform, health care  reform and elections in Holland and France.

Is the VIX still relevant?

The Financial Times recently asked readers: “Should investors worry that stock market ‘fear gauge’ is so low?” According to FT, the VIX is a clean, simple gauge that tends to “follow markets rather than lead them, and does a poor job of capturing more ephemeral but very real investor worries.”

As our client, Kyle Walters, founder of Dallas-based Atlas Wealth Advisors told me, “Many investors, over the last several years, have forgotten that the VIX, and the volatility associated with the VIX, is the reason we are compensated to invest in the stock market.” Walters said we should anticipate more volatility, and know it’s a good thing.  “Over the short run, the market is unknowable; over the long run, market economics are inevitable,” Walters added.

The New York Times’ Neil Irwin recently wrote that The Stock Market Is Weirdly Calm and explained why (sort of). If the last few years have taught investors anything, Irwin argued that investors are getting smarter about jumping to conclusions: “Those with a hair-trigger reaction to political news stand to lose, while those who bet on a continued steady and unexceptional expansion will win,” wrote Irwin. “Investors learned a lesson that it’s easy to overreact to political developments, and the same seems to have happened globally in the last several months,” added Irwin.

Maybe we’re not even measuring the right thing when it comes to investor fear?

Our take: Just as today’s low jobless rate does not really account for the millions of working age Americans who have dropped out of the workforce or who are working at jobs that pay much less than they used to, the VIX may no longer be measuring the right elements of fear and uncertainty.

As Barrons’ Ben Levisohn recently wrote, Hold On! The VIX Isn’t as Low as It Looks?!?! “First of all, the so-called Fear Index isn’t measured the same was that it used to be,” noted Levisohn. “In 2014, the CBOE changed the rules for the VIX index by including weekly options in the mix. One could argue that by taking that change out of the equation, the old VIX would have been lower in 2007 and possibly 2014,” Levisohn added.

Bill Schultheis, Principal, Investment Advisor of our client Soundmark Wealth Management in Kirkland, Washington told me that the VIX, by its very nature of measuring the magnitude of the options premium on the S&P 500, “continues to be a reliable measure of investors’ expectations of market volatility, not of volatility itself. Although the financial media continues to highlight VIX, for the average investor this tradeable security is irrelevant from a portfolio and financial planning perspective,” added Schulteis.

Michael R. Gold, a Senior Private Client Advisor of New York-based Gertsein Fisher, agreed. “The VIX simply gauges the psychological state of the investor. It’s interesting that we need an indicator like the VIX to tell us investors are nervous whenever the equity markets experience any unwelcome volatility. It is pretty obvious when our screens are flashing red that people will be anxious and the VIX will spike. Sure you can look at the VIX, but you can also turn on CNBC--if the Dow is off by triple digits, then there is going to be some fear out there. Keep it simple; if it’s not simple then you are asking the wrong questions,” noted Gold.

Are investors becoming too complacent?

According to Irwin, “Low volatility could make banks, hedge funds and other institutions more comfortable taking on extra leverage, paradoxically making the financial system less stable and more subject to large swings over time.” Soundmark’s Schultheis observed that we’re now experiencing the second-longest bull market on record. “There is a tendency for investors to become complacent and fearful. They may sell out of stocks even when minor corrections occur. Most recently this occurred during the market downturn at the start of 2016, and the subsequent sell-off when Britain voted to leave the European Union.” 

Opportunities for investors in a low-volatility climate

According to Schultheis, the current market climate of low volatility is an excellent time to review one’s financial plan, and specifically asset allocation between stocks and bonds for two reasons. “First, it provides a degree of comfort that one is financially able to weather the next market correction or bear market.  Second, it generates confidence that they are prepared to take advantage of a market downturn and to purchase (reallocate) from fixed income to stocks at an opportune time.” According to Schulthies, this is the opposite of what unfolds for most investors, as they sell stock positions throughout market declines due to heightened pessimism, fear and volatility attached to the VIX,” added Schultheis.

Gold believes now is an “incredible time” for investors to really take a look at where they are now, where they want to go and to determine if there are any gaps or obstacles that may be standing in their way. “When investors are not bombarded with headlines that the financial world is ending due to the apocalypse de jour, they have an opportunity to look at everything from a holistic standpoint and to be in even stronger financial position before the next storm inevitably comes.” Irwin, a renowned media pundit, believes the biggest risk of this period of ultralow volatility is that “by looking past the latest headlines out of world capitals, investors won’t send the signals that might prevent political leaders from making a mistake in the first place.”

However, as Schultheis cautioned, Soundmark tries to educate its clients about the importance of embracing market volatility and understanding that it is integral to the asset class that drives its premium return above riskless assets over time. Schultheis said many of his clients are aware of the extended nature of the current bull market and “voice their anxiousness” about the inevitable correction that comes with it.

Conclusion

“We remind clients that their current allocation between stocks and bonds reflects their ability to withstand market downturns.  These discussions are especially important for folks who are retired and drawing income from portfolios,”  said Schultheis. 

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TAGS: Kyle Walters, Atlas Wealth Advisors, Bill Schultheis, Soundmark Wealth Management, Michael Gold, Gertsein Fisher,VIX, market volatility