Whether you’ve watched him on Headline News, listened to his radio program or read one of his books, Clark Howard has established a loyal following. He is a national financial voice who’s known for helping consumers “save more, spend less and avoid getting ripped off.” Clark has long been a supporter of independent advisors for individual investors. More specifically Clark endorses NAPFA, the National Association of Personal Financial Advisors, as a resource for people to find quality fee-only planners.
Clark ‘s shows are generally full of sound and easy to implement tips which educate consumers on finding great deals. Like most financial celebrities, the nature of Clark’s advice is designed for the masses which can be effective for most, but not all. While he does a great job of teaching listeners about the qualities of different investment accounts, we don’t agree with much of his advice on investment strategies.
Active vs. Passive
A few of his overarching recommendations encourage investors to use index funds and target-date funds in their portfolios. He claims that by using other (active) mutual funds you “almost always will make less money over long periods of time.” While passive investing is a valid strategy for some, we believe we can achieve better performance by using a more active approach. This is why we offer our actual composite results to new clients which demonstrate how our strategy has outperformed over time. It is true that not everyone can be above average when investing, but that doesn’t mean that no one can.
Target-date funds align portfolios on the set it and forget it strategy which can add extra risk when stocks make big moves. Using a continuous strategy instead, allows for adjustments as the market changes, which helps avoid missed opportunities.
In our effort to keep the client’s interest first, we want to employ the very best investment strategy available to accomplish their objectives, which is why we use these same strategies for our own investments. Contact us to learn more about our continuous investment strategy and the results it has produced.
© 2015 Financial Symmetry, Inc.