The problem with the American Dream is that people don’t believe in it anymore. There’s a recent poll by CNN and it showed that 6 out of 10 people no longer believe in the American dream. Now when I was little my dad taught me about the American dream and for me it means just two things. One is that if you work hard, you save and invest you can have a great lifestyle, and you can have a great family time together. And the other thing is that, America’s about progress so that the future generation actually has more opportunity and growth and prosperity than the generation before.
And I think two things, the crashes recently in the last 15 years and still the sluggish, if not anemic, or almost dead economy, you’re really destroying a lot of people’s hope in the American Dream.
One thing advisers can do to help investors reclaim the American dream is to stop speculating and gambling with their money. There’s reams of academic information that shows that stock picking, market timing and track record investing are nothing but rank speculation and that’s why so many investors have lost faith, yet they’ve either tried to pick stocks and be in the market at the right time and they’ve panicked when markets are down. Discipline and building broad, diversified portfolios so they can have the ability to create real wealth over time, that’s the first step to creating the American dream.
Over the last 10 years, I think most advisers are doing what they’ve always done over the last 30 years. One is to chase hot sectors. So a couple years ago everybody’s dumping money into tech stocks or dumping money into commodities. And the other thing is, panicking when markets crash. You know, everyone knows the simple rules of investing. Buy equities, hold them long term, diversify and then buy when it’s low and sell when it’s high by rebalancing your portfolio. But nobody wants to do it.
2008 and 9 is a perfect example. A lot of people panicked when the market was down 50%, they’re still on the sidelines setting and waiting, for clear signals of when to get in.
20 years ago we used to tell investors, just don’t watch the news, turn off the news, you know. All that noise and all that excess, that’s messing up your peace of mind and causing you to have dysfunctional behavior. The problem is you can’t turn it off today because you got the internet. Even if you go to take your kids to eat, or your family out to dinner you got the big flat screen TVs showing the market up or down and some talking heads scaring you. So, you can’t just turn it off.
One of the things we’ve been telling advisers and investors to do is to have regular coaching meetings at least once a month where advisers are educating their investors. Almost, think of it like a weight watchers meeting, if you’re not proactive in training and educating people, they’ll just slide back into dysfunctional behavior.
What’s really neat about the symposium is just really the culmination of a dream that started about 20 years ago, which was to build a community of advisers and investors together, in our field that’s really rare because usually the information is either just for advisers and sometimes, and these symposiums are big conferences, they don’t want the investors to hear this stuff. On the other hand sometimes it’s just focused on the investors. And so here what we’ve done is build a community to show, hey we can all talk about these concepts and issues and the challenges together, we don’t have to stay separated from each other.
So we’re really excited about that. We think it’s one of the first ground breaking things that this industry has ever seen together like that.
One of my general messages is, yes there’s challenges, yes we want to overcome those, but hey things are pretty doggone good, we should appreciate them and be grateful for what we have here.