Cutting Through the Noise

Chicago is a great city, especially during the summer.  It has a certain pace, a certain irresistible energy & charm.  After moving to a high-rise building downtown many years ago, I also discovered something else:  it has a certain sound.  From more than 20 floors above street level, I could hear cabs honking, buses, trains, and even conversations... the constant sound of activity that had nowhere to go but up and bounce off of steel, glass, & concrete.

When I would visit the city where I grew up, a few hours away, I would get out of my car and just notice that I wouldn't hear anything except wind in the trees & my thoughts.  No cars honking.  No random conversations.  No buses or trains.  It was... peaceful.

Today's financial environment sometimes reminds me of living in that high-rise.  "Experts" providing lots of noise; talking fast; talking over each other to make their point without listening; taking credit for all that is good, and "spinning" reasons for anything possibly construed as negative.  It's no wonder that investors have a lack of trust in financial institutions, advisors, and media, especially after what the US economy has gone through over the last decade.

What should you do to cut through the noise?  Consider these as a starting point.

• Listen carefully.  Many experts aren't really talking to you, about you, or even about someone like you.  They're talking about a thing - Stock of the Day, Fund of the Week, today's indicator, etc.  While these comments may be slightly informative, they lack the context of what it means to you.
• Remember that you can only live your life.  What is good for someone else may not be appropriate for you.  You'll hear more about someone's good decisions than their mistakes.
• Watch out for articles that have a number in their headline ("The Top 6...", "The Best 7...", "8 Great Ways to...".).  Including a number is good for drawing attention to the article, but people often construe the number as a limitation rather than just a list.
• Understand the motivation behind comments.  Those that know me are familiar with my bias against the financial media.  I believe that most financial media are meant to excite or provoke fear rather than to educate.
• Strive to have financial confidence.  Educate yourself.  Develop a team of advisors that you are comfortable with, whose philosophy and process you understand, & that work together for your benefit.

As an advisor, my hope is that clients feel educated about ways to accomplish their goals, informed about how they're doing, and comfortable with the advice that is offered.  If you want to learn more about how Locker Wealth Management can help, visit http://www.lockerwealth.com and contact us today.

 - Alex Locker, CFP®

"Video Killed the Radio Star"

In August 1981, a new channel called MTV made its debut appearance.  Those of a certain age remember that MTV showed primarily music videos instead of reality TV.  The first video was called "Video Killed the Radio Star" by a British group called The Buggles.  The song lamented the end of the good-old days of radio due to the evolution of TV.

Changes in technology and regulation have also disrupted the brokerage industry's "good-old days" just as TV impacted radio, online media impacted newspapers, or the wheel impacted travel.  Some brokerage firms find themselves struggling with the changes society is imposing.  It used to be that you had to go to a large, "wirehouse" firm to get information about investments, or wait for the next day's newspaper (remember those?).  You may not have an idea of how much a transaction would cost; the number of investment options was dramatically less than what exists today.  Today, information is available online for free, and trades can be made for under $10 at some firms.  So why have an advisor?  See this link from the Certified Financial Planner Board of Standards for a few reasons.

Those that work with an advisors essentially want the same thing:  achieving a goal or avoiding various risks based on a trusting relationship. Unfortunately, that is not always the case, and a hodgepodge of titles with alphabet soup designations confuses the issue (Registered Representative, CFM, CLU, CFP®, Financial Advisor, Financial Consultant, etc.).

In upcoming posts, I'll discuss a few steps you can take to suppress the noise, create clarity, and make better decisions for your financial situation.